Poland’s CPI rose 3% year-on-year (y/y) in March, up by 0.9 percentage points from February, the country’s statistics office GUS said in a flash estimate on March 31.

Despite the increase, the March reading came in below expectations, with the consensus pointing to 3.3% y/y. The US-Israeli war on Iran pushed up fuel prices, GUS data showed, but the rise was smaller than anticipated.

“Lower-than-expected fuel price growth was the main driver of the positive surprise, rising by 15.4% month on month (m/m) instead of the anticipated 20% m/m or more. Food prices also came in below expectations, remaining unchanged on a monthly basis. For now, the fuel shock has not spilt over into other components of the inflation basket,” PKO BP said in a note.

Inflation remained within the National Bank of Poland’s (NBP’s) target range of 1.5–3.5% in March. CPI is expected to ease slightly in April following the government’s introduction of fuel price controls.

The March breakdown showed that prices of food and non-alcoholic beverages increased by 2% y/y, while energy prices rose by 3.9% y/y. Fuel prices increased by 8.5% y/y.

On a monthly basis, consumer prices rose by 1% overall.

“A slight decline in CPI inflation is expected in April, driven mainly by the impact of fuel prices. However, the outlook remains uncertain and sensitive to developments in the Middle East conflict and changes in the domestic fuel market,” PKO BP said.

The NBP should remain in a wait-and-see mode until conditions in energy commodity markets stabilise, analysts said.

“In the event of de-escalation, the lower-than-expected rise in inflation in March would increase the likelihood of a 25 basis point interest rate cut later this year,” PKO BP said.

The NBP’s reference rate stands at 3.75% after six rate cuts totalling 175 basis points in 2025 and one additional cut in March.