Inflation above expectations, but the revision of weights could still change a lot

Inflation markedly above expectations

In accordance with the data provided by Statistics Poland (GUS), CPI inflation in Poland went down from 2.4% YoY in December to 2.2% in January, coming in markedly above the market expectations and our forecast (1.9%). Data on January inflation is incomplete yet, and it is only preliminary due to the annual revision of weights in the inflation basket. This limits the scope for drawing conclusions from the data. Complete data on the evolution of prices in individual categories in January and February 2026, including the revised inflation index will be published in March.

Moreover, it should be noted that the GUS has changed its price indicator calculation methodology following the transition to the new COICOP 2018 expenditure classification effective this year, the new classification reflecting current consumption patterns more precisely, and bringing a more detailed classification of goods and services. The related changes in the inflation basket (range of products under analysis and data aggregation structure) and shifts of certain categories between individual sections may also have partly contributed to our January inflation forecast error.

Cheaper fuels reduced inflation

Inflation was primarily driven down by the prices of fuels (-7.1% YoY in January vs. -3.1% in December) falling as a result of the decline in oil prices in PLN terms seen in the global market towards the end of 2025. An upward impact on inflation was brought by a stronger growth in prices of “energy” (3.4% in January vs. 2.8%), which was a combined effect of electricity price hikes and gas price reduction in early 2026. At the same time, the food and non-alcoholic beverages growth rate did not change between December and January, standing at 2.4% YoY. Though we can currently observe some downward pricing pressures in certain food categories (particularly meat, dairy products, and oils and fats), the slowdown of annual price growth was hampered in January by last year’s low base effect (in January 2025, the prices of food and non-alcoholic beverages rose by just 0.2% MoM, which was the slowest monthly growth for a January since 2005). Based on the available data, we have assessed that core inflation in January stabilised at ca. 2.7% YoY. We estimate that monthly core inflation in January stood at approx. 0.5%, markedly above its seasonal pattern (0.1% for a January). It suggests that enterprises took advantage of favourable demand conditions, raising prices more decisively as part of annual January pricing updates.

Upside risk for our inflation path and rate scenario

With the starting point being higher than we expected (we forecasted the inflation to drop to 1.9% in January), we believe there is an upside risk to our forecast, in which inflation is to fall from 2.6% YoY in Q4 to 1.8% in Q1, and from 3.6% in 2025 to 2.2% in 2026. At the same time, the data also carries a slight upside risk to our scenario in which the MPC is to cut interest rates by 50bp in H1 2026.

It needs to be noted, though, that the January reading is a flash estimate burdened by substantial uncertainty connected with the annual revision of weights in the inflation basket. Experience from previous years shows that those adjustments can significantly change the inflation trajectory. For example, in 2025, the January reading was revised downwards by as much as 0.4 pp. This means that also this year the final reading might significantly differ from the preliminary data, which affects the reliability of conclusions concerning inflation and monetary policy trajectories in a short-term perspective.

Today’s higher-than-expected inflation data is slightly positive for the PLN and the yields on Polish bonds.