CPI inflation to remain above 4% y/y until end of 2021: analysts

According to the Central Statistical Office (GUS), consumer inflation amounted to 4.4 percent on an annual basis in June 2021, according to preliminary data. Compared to the previous month, the prices of consumer goods and services increased by 0.1 percent in May. According to economists, rising oil and food prices in the world – including rising grain prices – will increase the inflation level in the coming months. Some economists estimate that at the beginning of 2022 there will also be further increases in regulated prices, including electricity.

Analysts emphasize the fact that core inflation fell in June to the range of 3.6-3.7 percent. According to economists, in the following months, incl. high prices of commodities, freight, and a strong mismatch between supply and demand will drive up core inflation. They point out that the possibility of interest rate hikes this year is decreasing. The increase cycle may start next year in Q2.

(ISBnews)