According to a preliminary estimate, the CPI inflation rate for August was 4.3 percent year-on-year. This is a slight increase compared to the previous month, where the reading was 4.2 percent.
The index has stabilised at over 4 percent following last month’s rise, which was caused by the thawing of energy and gas prices. On a monthly basis, an increase of 0.1 percent was recorded. It seems that elevated inflation around 5 percent will stay with us until the end of the year.
We are already looking at the first quarter of 2025, when we may experience another surge in inflation assuming a complete cessation of shielding actions. At that time, the inflation index should peak and then begin to slowly fall. During this time, we see the first opportunity to start reducing interest rates.
This week we learned about the draft of next year’s budget, which deficit is almost PLN 290 billion. Such a potentially high deficit could affect the rhetoric of the Monetary Policy Council and become an argument for further pushing down reductions. However, looking into details, we see that the budget is additionally burdened by the repayment of maturing PFR and BGK bonds totaling over PLN 63 billion.
Bartosz Wałecki, Analyst, Michael / Ström Dom Maklerski
Source: https://ceo.com.pl/podwyzszona-inflacja-w-okolicach-5-proc-moze-pozostac-z-nami-na-dluzej-99309
