Polish November flash inflation data is set to release this week. According to an Erste Group Research report, the flash inflation is likely to have come in at 2.6 percent year-on-year. Sharp rise in food prices continue to be the main driver of growth and compensate for falling prices of energy and oil. At present, electricity costs for households are expected to remain unchanged in 2020.
Therefore, headline CPI is likely to peak at 2.7 percent in the first quarter of 2020 and ease in the rest of the year because of the base effect. If the government decides to unfreeze electricity prices, there are upside risks to the current forecast.
“On the back of raising headline inflation, core inflation should also continue its upward trend. We see core inflation for November at 2.5 percent, up from the 2.4 percent observed in October”, added Erste Group Research.
