The inflation in Poland decreased to 11.5 percent year-over-year in June compared to 13 percent in May, according to preliminary estimates by the Statistics Poland (GUS). The consensus forecast was for a reading of 11.7 percent year-over-year.
Prices of goods and services remained at the same level in June compared to the previous month. The lower inflation in June was a result of a slowdown in all its main components: food prices, fuel, energy carriers, and core inflation.
For the second consecutive month, prices remained unchanged on a month-to-month basis. All major categories contributed to the downward pressure on inflation.
According to Polish PKO Bank economists, fuel prices decreased by 18 percent year-over-year, the growth of food prices slowed down to 17.8 percent, and energy prices to 18 percent.
“Our estimated core inflation decreased to around 11 percent year-over-year from 11.5 percent year-over-year in May,” PKO BP economists calculated.
In June, the Monetary Policy Council kept interest rates unchanged. The National Bank of Poland reference rate remained at 6.75 percent. The decision was in line with market expectations, which are awaiting the first cuts in interest rates.
According to the President of the National Bank of Poland Adam Glapiński, such a move would be possible if the annual CPI rate falls below 10 percent, which economists predict could happen as early as autumn.
“With this pace, we expect to see 9.8 percent year-over-year in August. Monetary Policy Council will likely lower interest rates in September.” economists at ING bank said. “However, we are concerned that rate cuts in Poland — more than one cut in 2023 — will result in a prolonged return of inflation to the target.”