Cheap food keeping inflation in check, for now
Food prices, which have recently helped keep inflation in Poland under control, are expected to become a major inflation driver over the coming year. In July, food prices fell 0.4% y/y, offsetting a 15.8% increase in fuel prices and helping keep CPI inflation at 3%. Economists attribute current food deflation to cheap imports, oversupply in pork and dairy markets, and aggressive discount-store pricing. However, weaker harvests, higher global agricultural prices, expensive natural gas and fertilizer, and production cycles are expected to reverse the trend.
Erste Bank expects food inflation to reach about 1% y/y by year-end, while Credit Agricole forecasts it could peak at around 7% y/y in Q3 2027.
(pb.pl)
