Poland’s CPI rose 8.6% year-on-year in December, with the annual growth rate increasing by 0.8 pp from the previous month, the statistics office GUS announced on January 14.
A high value over 21 years confirms the flash estimate that GUS published at the end of December. Soaring consumer prices have already prompted the National Bank of Poland (NBP) to raise interest rates four times in October-January from 0.1% to 2.25%.
While inflation is expected to rise further to 9%y/y – 10%y/y in January-February, at least one further increase is all but certain in the first half of the year.
The government’s anti-inflationary measures, which will take effect next month, will slow inflation growth to some extent, but only temporarily, effectively pushing peak price growth towards August. This will likely require further central bank intervention for interest rates to climb to at least 3%.
Prices for food and non-alcoholic beverages drove the CPI’s growth in December, according to the data breakdown. Food prices rose 8.6% y/y in the twelfth month, compared to growth of 6.4% y/y in November.
Housing and energy prices rose 11.2% y/y in December from 10.7% y/y the previous month.
Fuel prices rose 32.9% year-on-year in December, down 3.7pp from November. Transport prices – of which fuels are a part – rose overall by 22.7% year-on-year, slowing by 1.4pp compared to the previous month. The slowdown was an effect of cuts in excise duties, introduced by the government as part of its “anti-inflation shield”.
Overall, goods prices rose 9% y/y in December after rising 8.1% y/y in November. Services price growth was 7.6% year-on-year, adding 1pp.
In monthly terms, the CPI rose 0.9% in December, with the growth rate increasing 0.8pp from November, GUS also said.