Poland’s CPI growth accelerated to 3.4% year on year in August from 3% y/y in July, the country’s statistical office GUS said on September 15.

The August reading beat the consensus, which expected a 3.3% y/y gain, and was unchanged from GUS’s flash estimate, while remaining within the National Bank of Poland’s (NBP’s) broad target range of 1.5%-3.5%, although above the central bank's target figure of 2.5%.

Services prices rose 5.6% y/y in August, while goods prices increased 2.5% y/y, GUS data showed.

“Inflation was pushed up by fuel prices and, to a lesser extent, core inflation, while food prices acted as a disinflationary factor,” PKO BP said in a note.

“Fuel prices at filling stations rose 5.2% m/m in August, while their annual growth rate accelerated to 24.2% from 15.8%. Unfortunately, the coming months may bring further increases in fuel prices at filling stations in response to the sharp rise in crude oil prices,” PKO BP also said.

Food and non-alcoholic drinks prices fell 0.9% y/y in August after declining 0.4% y/y in July, GUS’ detailed data showed. Meanwhile, transport prices – where fuel prices play a major role – increased 11.2% y/y, accelerating sharply from 7% y/y in the preceding month.

Elsewhere, prices related to housing, water, electricity, gas and other fuels rose 4.6% y/y in August, compared with 4.5% y/y in July.

Prices in recreation, sport and culture rose 6.5% y/y. Health prices increased 4.7% y/y, while alcoholic drinks and tobacco were up 6.6% y/y.

Clothing and footwear prices fell 2.9% y/y, while prices of furnishings and household equipment declined 0.2% y/y.

Consumer prices rose 0.3% month on month after increasing 0.8% m/m in July, GUS data also showed. Transport prices increased 3.5% m/m and added 0.37 percentage points to the monthly CPI reading, the largest positive contribution among the main categories.

The August reading left inflation close to the upper end of the NBP’s target range as policymakers assess the impact of higher transport and energy-related prices.

“Each additional month of high fuel prices increases the risk of second-round effects. However, the situation remains significantly less inflationary than during the pandemic and after the outbreak of the war in Ukraine. In Poland and abroad, there are visible income constraints on raising prices,” ING said in a note.

That lowers the likelihood of significant rate hikes, analysts say, even though if the current tensions persist in the coming months, CPI inflation could rise to around 4% y/y. 

“A marked decline in inflation should not be expected until the second half of 2027. We expect the Monetary Policy Council (MPC) to leave interest rates unchanged at least until the end of 2026 while monitoring risks related to the energy-market situation. In our view, any monetary policy easing could come no earlier than the second half of 2027,” ING also said.

Poland’s reference interest rate is 3.75%.