Inflation still low – GUS

The Central Statistical Office of Poland (GUS) stated in a press release on Friday that consumer inflation was 0.8 percent, in annual terms, in December. This was a slight increase over the previous month, as the rate was 0.0 percent in November. Compared to the previous month, the prices of goods and services increased by 0.7 percent, GUS also reported. The biggest impact on the formation of a price index of consumer goods and services at this level was higher food prices (by 2.7 percent) and transport (by 4.3 percent), GUS reported. The economists consulted by GUS indicated that the December CPI reading has a neutral meaning on the decision of the Monetary Policy Council (MPC) on interest rates in 2017. The Council is currently of the consensus that interest rates should be maintained at the current level throughout 2017. Meanwhile, the EU average level of inflation increased to 1.5 percent in December, from below 1.0 percent during previous months in 2016. Wiktor Wojciechowski of Puls Bank predicted that inflation levels would return to a similar level (to the EU average) in Poland later in 2017. “Our forecast assumes that in the first quarter, 2017, average CPI inflation will rise to 1.6 percent, y/y, and then speed up to approximately 1.8 percent, y/y, in the third quarter, and then decelerate to 1.6 percent, y/y, in the last three months of 2017,” he said in a press interview.