Inflation will increase in July in Poland because of energy prices

Consumer inflation in Poland is forecasted to increase to 4% y/y in July due to partially unfreezing energy prices, up from 2.5% expected in June, according to Credit Agricole Bank Polska analysts. The bank revised its annual inflation expectations to 3.6% y/y for the current year, up from 3.3%, and 4.2% in 2025. Factors include weaker-than-expected transmission of VAT rate restoration and adverse weather affecting food prices. The bank anticipates a monetary policy easing cycle starting in the second half of 2025, with a projected reference rate decrease to 5.25% by year-end 2025.

Economic stability is expected to facilitate zloty appreciation, with EURPLN forecasted at 4.24 by 2024-end and 4.20 by 2025-end.