Inflation comes in line with the flash estimate published by Statistics Poland
In accordance with the final data published by Statistics Poland, CPI inflation in Poland went up to 4.1% YoY in June, from 4.0% in May, in line with Statistics Poland’s flash estimate. Inflation was driven up primarily by a stronger price growth in the “fuels” category (-10.0% YoY in June vs. -11.4% in May). Such growth resulted from a temporary increase in global oil prices driven by the escalating Israeli-Iranian conflict in June 2025. Inflation was also driven up by higher core inflation, which edged up from 3.3% YoY in May to 3.4% in June in accordance with our estimates. Core inflation rose primarily due to a stronger price growth in “communication” (due to rising prices of telephone and telefax services) and “transportation, excluding fuels” (mainly due to higher prices of transportation services) categories. An opposite impact came from a slower price growth in the “food and non-alcoholic beverages” category (4.9% vs. 5.5%). The drop was attributable primarily to the lower prices of pork (with purchasing prices of pigs being lower than the year before), vegetables (due to a relatively good harvest) and a slower growth in the prices of butter (mainly due to the last year’s high base effect). Inflation was also driven down by a slightly slower price growth in the “energy” category (12.8% vs. 13.0%). This, in turn, was facilitated by a slower growth in the prices of liquid and solid fuels and heat energy.
Wage pressure inhibiting inflation decline in services
In our opinion, core prices increased by 0.2% MoM in June, which is slightly above their seasonal pattern (0.1% MoM), indicating continued elevated inflationary pressures. It is also worth noting that the growth in prices of services accelerated again, to 6.3% YoY in June vs. 6.0% in May, while the growth in prices of goods is markedly slower (3.2% vs. 3.3%) and following a mild downward trend over the last couple of months. The easing yet still relatively strong wage pressure continues to be the main pro-inflationary factor in services. We expect the nominal wage growth in the national economy to go down to 7.1% YoY in Q3, from 8.3% in Q2 and 10.0% in Q1. Therefore, despite the continued decline, it will remain relatively high by historical standards.
Inflation on the home straight to its target
Today’s data is consistent with our medium-term inflation scenario (see MACROmap of 09/06/2025), which assumes a sharp inflation decline in July so that the inflation will come in close to the NBP target of 2.5% ± 1 pp. The decline will result primarily from a strong drop in the prices of energy due to last year’s high base effect connected with the unfreezing of gas and energy prices in July 2024 (see MACROpulse of 14/08/2024). At the same time, inflation will run within the range of admissible deviations from the NBP inflation target across the entire horizon of our forecast (i.e. until the end of 2026). We believe that the MPC will use this as an argument in favour of further easing monetary policy this year. Nonetheless, we expect that due to uncertainty surrounding fiscal policy in 2026 and elevated core inflation, the Council will put monetary easing on hold until November 2025 when, following the release of the November projection, it will move forward with another 25bp cut. An increased uncertainty surrounding whether the Polish President will sign the bill to freeze energy prices, which has been linked to the so-called wind farm bill, by the end of this year is another argument in favour of putting interest rate cuts on hold until November (in the July projection, energy prices were to be unfrozen in Q4).
In our opinion, today’s data on inflation are neutral for the PLN and the yields on Polish bonds.
