Polish flash consumer price inflation stays flat in August

The statistical office of Poland released a flash estimate of August inflation today. The flash readings indicate that the headline consumer price inflation stayed flat at 2 percent year-on-year, consistent with consensus expectations. The flash figures do not include all details; however, they affirmed that energy prices have continued to be significant contributor to price growth. Food prices came in at 2.1 percent year-on-year.

On a sequential basis, consumer price inflation came in at 0 percent. Food prices dropped on a sequential basis as well, coming in at 0.7 percent. Food price development is considered as a wild card for a near-term inflation outlook because of drought in Europe, said KBC Market Research in a report.

Nevertheless, the core inflation remained at very low levels in August, which hints that the underlying inflation pressures have been still comparatively low. It suggests that the NBP could be satisfied with its policy set up, which assumes no change in official interest rates for near future, stated KBC Market Research.