The April core inflation reading was 4.1% year-on-year. Excluding energy and food, prices increased by 0.7% month-on-month. The year-on-year core inflation rate has been declining dynamically for almost a year, but the base effect is running out. This may be the last month with such a significant year-on-year decline in the index. Consequently, core inflation will not reach the levels observed in broad CPI readings and is expected to rise in the coming months.
The dynamics of real disposable household income remain high. We expect private consumption to remain the main driver of economic growth this year, which will be reflected in price pressure.
Bartosz Wałecki, Analyst at Michael / Ström Brokerage House
