Food prices compared to August last year, they increased by 4.1%. Media Pricing energy rose 10.3% annually.
On the other hand fuel prices for private means of transport were 1.7% lower than the previous year.
In a commentary on data from the Central Statistics Office Jakub Rybacki of the Polish Economic Institute he assessed that the high rate of inflation growth is a result of the July inflation energy price increases, and August results were boosted by price increases related to water supply and sewage services. In the coming months, we expect inflation to stabilize, mainly due to the high increase in services prices. It will likely keep core inflation around 4%. – Rybacki emphasized.
According to him, similar results will be observed in other countries of the European Union. In Germany, core inflation was close to 3.1% in August, and in Spain 2.8%. – he emphasized.
Citing data from the European Central Bank, the EIP economist highlighted that wage pressure in Western Europe is weakening, which will contribute to a lower rate of price growth in the future. However, the decline is likely to be slow. – he said.
He emphasized that “Inflation will likely also be supported by rising energy and agricultural commodity prices. Analysts currently predict that oil and gas prices could rise by 5-7% by the end of the year, which will have a direct impact on transportation and production costs. Agricultural raw materials are also likely to become more expensive. As a result, inflation in 2025 will continue to hover above 3% y/y even after the changes related to energy price increases expire. – he concluded.
As they noticed ING economists Rafał Benecki and Adam AntoniakGlobal inflation trends are favourable and major central banks are entering the phase of easing monetary policies. They noted that the extension of protective measures on energy prices for households for next year, declared by the government, could translate into a lower inflation trajectory than assumed by the National Bank of Poland. According to ING, inflation in 2025 will be 4.6% per year or lower, compared to 5% per year estimated by the National Bank of Poland.
ING representatives predict that The Monetary Policy Council will leave interest rates unchanged this year, and NBP Chairman Adam Glapiński “will emphasize the uncertainty of the inflation path.” They added that statements by Council representatives suggested a growing majority in favor of interest rate cuts next year.
We believe that the second half of 2025 will bring a significant drop in inflation. – ING economists assessed. According to them, this will create room to start a cycle of monetary policy easing. They expect the first interest rate cuts of 25 basis points to occur in the second quarter of next year and – as they noted – by the end of 2025, the key rate may be reduced to 5-4.75%. (currently it is 5.57%).
Economists noted that compared to the previous month, there was a decrease in food prices (-0.1% m/m), although they had expected it to be larger. In addition, fuel prices decreased (-0.9% m/m), while energy prices increased (+0.1% m/m).
In their view, core inflation in August was 3.7-3.8%. The annual rate remains high and, according to them, it will be difficult to see a further significant decline. They estimated that from September onwards there could be an increase in education prices due to increases in teachers’ salaries in the public sector, which – as they pointed out – could affect the costs of education-related services, such as private lessons and language courses.
According to ING, CPI inflation will remain in the 4-5 percent range until the end of the year, and core inflation could rise.
PKO BP economists noted that the data published by the Central Statistical Office were in line with their expectations and consensus. They estimated that inflation in August was driven by food prices, which decreased by 0.1 percent month-on-month, which, however, increased its annual dynamics to 4.1 percent year-on-year from 3.2 percent y-o-y in July. This monthly variation deviates significantly from the seasonal pattern, which is part of the broader trend we are observing towards the end of disinflationary processes in food prices. – he explained.
It was noted that fuel prices decreased by 0.9% in August. m/m, which means that deflation occurred in this category on an annual basis (they fell by 1.7% y/y). According to PKO BP In the following months, the disinflationary impact of fuel prices will be more difficult due to the low statistical base, as prices in September and October 2023 fell significantly.
According to the commentary, energy prices remained relatively stable in August (up 0.1% m/m). Economists assessed that the second half of the year should bring little change, although the exception is heat prices. Another sudden increase – according to the authors of the commentary – could occur in January 2025 with the next phase of energy price liberalization.
PKO BP estimates that core inflation (excluding food and energy prices) stabilised at 3.8% in August. y/y, and prices in basic categories increased by 0.3% in the month.
Core inflation dynamics have strengthened recently, which may be related to rising water rates – marked. The authors of the commentary note that services price inflation is higher than goods price inflation, reflecting pressure on costs (mainly labour costs) in a context of strong demand for consumer services. According to them, core inflation in 2024 will remain high and may even increase, although they estimate that it can be expected to gradually ease next year.
According to economists at PKO BP, inflation reached a “plateau” in August and will remain in the 4 to 5 percent range until the end of the year. year-on-year.
