Polish December inflation likely to confirm flash estimate of 3.4 pct, core rate to rise above 3 pct

Polish inflation data for the month of December is set to release tomorrow. The flash inflation print had resulted in a heated discussion about the possible risks of inflation remaining on elevated levels throughout 2020, noted Erste Group Research in a report.

The flash data had shown inflation at 3.4 percent year-on-year and at 0.8 percent on a sequential basis, surpassing market expectations. Sharp rise in food prices mainly drove the strong rise in the headline figure. Furthermore, services prices continue their upward trend. The flash reading is expected to be confirmed tomorrow, stated Erste Group Research.

“Given the sharp increase of the headline inflation figure in December, we think that core inflation (excl. food and energy prices) will land above 3.0 percent for the first time since the end of 2011. We believe that core inflation will continue to increase due to rising pressure from the services sector”, added Erste Group Research.