Basic inflation down
Base inflationand exactly its most popular measure – excluding prices food and energy, it was in May 3.3 percent year on year. The prices of services and goods (apart from the mentioned food and energy) have just increased in May compared to May last year. Latest The reading of the National Bank of Poland is confirmed by the estimates of economists who calculated the level of base inflation after publication by Central “ordinary” indicator, or CPI inflation.
And what next?
It is also a reading slightly lower than April (3.4 percent). A decrease in base inflation to 3.3 percent It means its lowest level from January 2020 (then it was 3.1 percent). According to PKO BP economists, this indicator should gradually fall, to about 3 percent. at the end of this year. In turn, experts bank Santander think that base inflation can even “go down a bit below 3 percent“.
What is base inflation?
The most famous type of base inflation (we are writing about it in this text) is the measure of inflation excluding the most variable food and energy prices. They have a limited influence on the decisions of the Monetary Policy Council. That is why the NBP and MPCs are closely following base inflation readings. “It is assumed that base inflation is the part of inflation that is associated with inflation expectations and demand pressure, and which is not directly dependent on supply shocks” – explains the NBP.
NBP publishes four base inflation indicators every month. And so inflation:
- After excluding administered prices (subject to state control), it amounted to 2.5 percent, compared to 2.7 percent. a month earlier;
- After turning off the most variable prices, it amounted to 4.6 percent, compared to 4.6 percent. a month earlier;
- After switching off food and energy prices, it was 3.3 percent, compared to 3.4 percent. a month earlier;
- so -called 15 % The average average, which eliminates the influence of 15 percent. Price basket with the smallest and largest dynamics amounted to 3.8 percent, compared to 3.9 percent. a month earlier.
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