Poland will probably exit deflation this year

Although a stronger PLN may extend the period of deflation, analysts believe that a turning point has been reached in the deflationary cycle that began in August 2014. 

"The CPI is likely bottomed out in February, and after increasing in March, and it will likely gradually increase in the forthcoming months, turning positive again by the end of Q4 15", notes Societe Generale. 

The central bank expects deflation to come in at -0.5% yoy at the end of 2015. The Ministry of Finance expects the country to exit deflation sooner than the central bank is forecasting. It is possible, however, that a stronger PLN and volatile oil prices create uncertainty around the ministry's expectation. 

In its recent World Economic Outlook, the International Monetary Fund forecast Poland's CPI to accelerate to 0.4% yoy at the end of this year. According to Societe Generale, it will instead be in the range of 0.1-0.3%.