Polish inflation slowed to its lowest rate in 17 months, making it more likely that the central bank will start cutting interest rates as early as in September.
(Bloomberg) — Polish inflation slowed to its lowest rate in 17 months, making it more likely that the central bank will start cutting interest rates as early as in September.
Consumer prices in July rose 10.8% from a year earlier, compared with 11.5% in the previous month, according to preliminary data published on Monday. The reading was below the median estimate of 11% in a Bloomberg survey. Consumer prices fell 0.2% on the month.
The fifth straight month of declining inflation is likely to fan expectations that monetary easing is imminent. Central bank Governor Adam Glapinski said earlier this month that a quarter percentage-point rate cut was on the cards for September if inflation slows to single digits and continues to decelerate.Â
Several policymakers who have spoke since then said that may happen next month. Even then, inflation will still remain much above the central bank’s 2.5% target.Â
The bank’s projections show that price growth will return within the central bank’s tolerance range in the second half of 2025, fueling criticism that any easing now would be premature.Â
Poland holds general elections in the fall, most likely October. The cost-of-living crisis, sparked by the highest inflation in quarter of a century, has become one of the themes for the ruling party’s campaign as it is running neck-and-neck with its main opposition rivals.
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