Poland: Inflation to fall below central bank’s target in 4Q - ING

Jakub Rybacki, Economist at ING, notes that Poland’s CPI remained stable at 2%YoY with higher core inflation and from September onwards, they expect CPI to decelerate and 4Q readings to fall below the lower boundary of the central bank's inflation target

Key Quotes

“According to the flash reading, CPI remained stable in August at two percent year on year.”

“Based on the available data, we estimate core inflation to be somewhere between 0.7% and 0.8%YoY (vs 0.6%YoY in July). Still, core CPI increase is caused rather by statistical effects – we expect a limited rise in the next few months.”

“From September onwards, we expect inflation to slow down as food prices fall, reflecting the lower prices of agricultural products globally.”

“All in all, we expect CPI to undershoot the lower boundary of the central bank's target in 4Q18, with a drop close to 1%YoY.”

“We also forecast increased prices of wheat products and meat as an aftermath of recent heatwaves in Europe. Thus CPI should increase above 2%YoY again in March 2019.”