Polish inflation accelerated anew in January on energy and shelter costs, though probably not enough to sway policy makers expecting a sharp easing in price growth to lift interest rates.
(Bloomberg) — Polish inflation accelerated anew in January on energy and shelter costs, though probably not enough to sway policy makers expecting a sharp easing in price growth to lift interest rates.
Consumer prices rose 17.2% from a year earlier in January, compared with 16.6% in December, according to data released on Wednesday. The reading was just short of the median estimate of 17.6% in a Bloomberg survey of 29 economists. Prices rose 2.4% on the month.
Poland’s Monetary Policy Council left the key interest rate unchanged at 6.75% for a fifth consecutive month last week and Governor Adam Glapinski said he expects inflation to retreat to 6% by the end of the year. While he reiterated that it’s too early to discuss rate cuts, investors see the benchmark falling by about 1 percentage point in 12 months.
Glapinski’s forecast clashes with the outlook from the European Commission, which sees Poland battling the European Union’s second-highest rate of consumer-price growth of 11.7% this year.
“The peak of inflation has clearly flattened,” mBank economists wrote in a Twitter comment following the data release.
January inflation is the first reading to reflect a government freeze on households power prices following a spike in energy costs last year. At the same time, Poland brought back a 23% value added tax on fuels, electricity gas and heating, adding to uncertainty about how new rules may impact consumer prices.
–With assistance from Joel Rinneby and Konrad Krasuski.
(Updates with economists’ quote in fifth paragraph.)
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