Polish inflation likely to accelerate above NBP’s target rate in months ahead

Poland’s pace of inflation is expected accelerate gradually in the months ahead. According to an Erste Group Research report, Polish inflation is expected to accelerate from December’s 2.1 percent year-on-year and reach above the National Bank of Poland’s target rate of 2.5 percent year-on-year in the summer months.

Additional labor market tightening, especially accelerating wage growth, should eventually translate into demand pressure and a core inflation increase in the months ahead. Meanwhile, the effect of external factors such as food or oil price changes on the inflation pace are likely going to be restricted in the second half of the year, due to a base effect.

“Hence, we expect the inflation rate to ease to 2 percent y/y toward the year-end”, added Erste Group Research.

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