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NBP inflation outlook hinges on government measures. Eurozone industrial output falls short

ECONOMYNBP inflation outlook hinges on government measures. Eurozone industrial output falls short
  • On Monday, the National Bank of Poland (NBP) published two scenarios in its inflation report, depending on whether the government extends anti-inflation measures or not (both forecasts assume that interest rates will remain stable). Assuming the extension of a zero VAT rate on food and energy price regulation, the NBP expects inflation of 3% this year and 3.4% in 2025. On Wednesday, the Polish Ministry of Finance made a decision on one of the protective measures – the zero VAT rate on some basic food items will not be extended (it expires at the end of March). The decision was justified by falling inflation.
  • February’s consumer inflation in Germany was confirmed at 0.4% m/m and 2.5% y/y (HICP 0.6% m/m and 2.7% r/r). In annual terms, it is the lowest since June 2021. January’s industrial production in the Eurozone disappointed (-3.2% m/m against estimates -1.5% m/m, -6.7% y/y against estimates -2.9% y/y). The CPI inflation in the US for February was slightly higher y/y than market expectations (acceleration from 3.1% to 3.2%, market forecast unchanged), even in the core component (slowdown from 3.9% to 3.8%, market forecast 3.7% y/y).
  • On the main currency pair, the euro weakened against the US dollar over the week and was quoted at 1.09 USD/EUR on Friday morning. Trading on the PLN/EUR currency pair mainly took place within the range of 4.275 – 4.300 PLN/EUR (the zloty is at 4-year highs). Against the dollar, the zloty was quoted in the range of 3.91 – 3.95 PLN/USD.


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