Polish flash headline inflation likely to have remained stable in August

The Polish inflation data for the month of August is set to be released this week. According to an Erste Group Research report, the flash consumer price index is expected to have remained stable compared to the previous month at 2 percent year-on-year.

The recently observed lower dynamics of food prices is expected to have kept inflation stable in August. In the months ahead, the consumer price inflation is most likely to move towards the lower bound of the inflation target, given the base effects. Such development of price dynamics underpins the dovish stance of the MPC.

Furthermore, the core inflation in Poland is stable at about 0.6 percent, underpinning the view of limited inflationary pressure in the economy, added Erste Group Research.