Energy Shock and Polish Inflation Analysis

Poland's inflation is rising due to a global energy shock and oil prices exceeding $100/bbl, but a cooling labor market and weak consumer demand are limiting broader price pressures.

Key Takeaways

• 1.Polish headline inflation rose above 3% YoY in April, driven by an energy shock from conflict in the Middle East pushing oil prices above $100/bbl.
• 2.The labor market is cooling with wage growth slowing to 5.4% YoY and employment declining, which acts as a constraint on consumer demand.
• 3.Monetary policy is expected to remain stable with the main rate at 3.75% for the rest of 2026, though a hawkish rhetoric will persist.

Table of Contents

• Supply-side shock drives inflation higher
• Labour market is cooling
• Activity growth in industry and construction moderate
• Central bank may stick to wait-and-see policy stance for now
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