Consumer inflation in October turned out to be in line with the flash data (6.8% y / y), but its growth will continue and it is expected to exceed 8% y / y at the beginning of next year. Economists then expect inflation to decline. At the same time, they expect that the increased inflation will induce the Monetary Policy Council (MPC) to raise interest rates for the third time in a row – in December.
According to the Central Statistical Office (GUS), consumer inflation amounted to 6.8% y / y in October 2021. Compared to the previous month, prices of goods and services increased by 1.1%. In annual terms, the increase in the prices of services and the prices of goods amounted to 6.8%. In terms of m / m it was + 0.3% and + 1.3%, respectively.
Economists indicate that the double-digit price growth covers an ever wider range of goods and services, with the highest dynamics being still in “fuel for private means of transport” (increase by 33.9% y / y), “poultry meat” (increase by 18, 8% y / y) and “garbage collection” (increase by 18.5% y / y).
According to them, CPI inflation will exceed 7% y / y in December, and 8% – in the first months of 2022.
At the same time, core inflation will remain high. Analysts estimate its level in December at 4.5-4.6% y / y.
The environment of increased inflation will mean that – according to economists – the tightening of monetary policy will be continued, and interest rates in Poland will probably rise in December – by 50-75 bp in the case of the main reference rate (which after increases in October and November by a total of 115 bp is now 1.25%.
Below are the most interesting comments from analysts:
“Price increases have a wide range, energy is more expensive, and cost pressure is spreading over the entire inflation basket. This is visible in the galloping prices of goods, whose inflation in a few months accelerated to 6.8% y / y and joined the high inflation of services prices (currently also 6.8% y / y) “- chief economist of ING Bank Śląski Rafał Benecki.
“In our opinion, inflation will continue to rise in the coming months – in November it will clearly exceed 7% y / y, in December it will be close to 8% y / y, and in early 2022 it will exceed this level. Inflation processes will probably intensify until the end of Q122. “- analysts of PKO Bank Polski.
Source: ISBnews
