Inflation in Poland accelerates, Eurozone surprises with GDP growth in Q3.

• This week in Polish macroeconomic statistics, a preliminary estimate of consumer inflation for October was published. Consumer prices increased by 0.3% m/m (+0.1% m/m in September), while the annual dynamic accelerated to 5.0% according to the market estimate (+4.9% y/y in September). CPI inflation therefore accelerates for the seventh month in a row, and in October it reached the highest level since December 2023. Prices have risen for food and non-alcoholic drinks (+4.9% y/y) and energy (+11.3% y/y). The final data will be published on November 15, while core inflation for October will be published on November 18 (in September it accelerated to 4.3% y/y).
• In the euro zone, the higher than expected dynamics of the Gross Domestic Product (GDP) in the third quarter was a pleasant surprise (0.4% q/q versus the estimated 0.2% q/q; 0.9% y/y versus the estimated 0.8% y/y). GDP growth quarter to quarter is the highest for two years. The German economy unexpectedly grew by 0.2% q/q (the market estimated -0.1% q/q), avoiding a recession (-0.3% q/q in the second quarter). German CPI inflation unexpectedly accelerated in October to 2.0% y/y (HICP 2.4% y/y). In the euro zone, October HICP inflation was preliminarily +0.3% m/m and +2.0% y/y, accelerating to 2.7% y/y in the core component. The likelihood of a more significant interest rate cut at the ECB’s December meeting is diminishing after this data.
• At the end of October, the euro managed to slightly strengthen against the dollar and was quoted at 1.087 USD/EUR in early Thursday afternoon. The Polish zloty this week remained mainly in the wider area of 4.35 PLN/EUR against the euro. Against the dollar, the zloty slightly strengthened towards 4 PLN/USD over the week. The US presidential elections pose a risk of very high volatility in the coming week, and a significant weakening of the zloty cannot be ruled out.

Author/Source: AKCENTA CZ a.s.