Polish headline consumer price inflation likely to have moved towards target in July

Polish headline consumer price inflation is likely to have moved towards the inflation target in July. According to an Erste Group Research, the Polish inflation is expected to have moved towards 2.5 percent, before decreasing toward its lower bound at the end of 2018, due to base effects. Inflation is expected to have been driven by food prices and fuel prices, which might be dragged down by the recent appreciation of the zloty. Overall, Polish inflation is likely to reach 1.7 percent in 2018. The still limited inflationary pressure underpins the dovish stance of the MPC, added Erste Group Research.

Meanwhile, the PMI is likely to have stayed stable in July compared to the previous month’s figure. The currently observed levels of the PMI imply that the growth momentum should stay strong. Strong growth in Poland is likely to be underpinned by favourable sentiment in Germany. According to Erste Group Research, PMI is expected to have arrived at 57.3 in July, a rise from 55.9 in June.