Cooling Polish Inflation Buys Time for Policymakers

Poland's inflation fell to 3.1% in May, lower than expected due to falling food prices, allowing the central bank to keep interest rates steady.

Key Takeaways

• 1.Polish CPI inflation unexpectedly dropped to 3.1% YoY in May, down from 3.2% in April and significantly below the 3.7% consensus forecast.
• 2.The decline was primarily driven by a 1.0% MoM drop in food prices, alongside core inflation pressure that was weaker than anticipated.
• 3.The Monetary Policy Council (MPC) is expected to maintain its 'wait-and-see' stance and keep interest rates unchanged through the end of 2026.

Table of Contents

• Inflation expectations of households seem to be anchored
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