Inflation in July 2024. Analysts expect an increase due to expiring anti-inflation shields

On Friday, in a quick estimate, the Central Statistical Office (GUS) reported that the prices of consumer goods and services in June 2024, they increased by 2.6 percent year-on-yearand compared to the previous month they increased by 0.1%.

In its commentary on these data, investment bank Goldman Sachs noted that the reason for the increase Inflation there was a 16% increase in food prices. month to month. It was noted that food prices increased by 1.6% per year. y/y to 2.5 percent y/ri – it was recalled that this is related to the April return of the 5% VAT rate on these products. The bank's analysts also added that growth had slowed down fuel prices transport from 3.6 percent y/y to 1.6 percent y/y.

Goldman Sachs economists also said that they expect a “significant increase” in inflation in Poland in July due to the partially expiring anti-inflation shields regarding energy prices for households. They noted that there is still “significant uncertainty” about the overall impact of these goods on inflation, but based on the new rates for electricity and gas, the bank expects their combined impact on the CPI this year to be around 1.8-1.9 percentage points in July. The bank also estimated that core inflation in Poland is still falling, and in June it decreased from 3.8 to 3.7 percent year-on-year. “We maintain a relatively dovish view of the dynamics of core inflation in Poland. (…) We expect that lower-than-expected inflation will prompt the NBP to cut rates earlier than the latest recommendations suggest, and we forecast the first cut for the end of this year (although we take into account the risk of its delay until the first half of 2025),” the bank's analysts wrote in a commentary to Central Statistical Office data.