NBP: Inflation to remain low

Poland’s National Bank (NBP) said that the rate of inflation, based on the consumer price index (CPI), will continue to be at a lower level than had been targeted earlier in the year. The projection expected “only a gradual increase” in inflation, citing the lower-than-expected increase in GDP and limited inflationary pressures in Europe as contributors to continued low inflation. “The output gap in the coming years will improve only slightly. It is also expected that the growth rate of import prices will remain low, which is shown in the projected low inflation in the Euro area and the long-term trend indicating an appreciating zloty,” added the report. However, it also cautioned that the report did not take into account possible one-off factors that could contribute to the currency’s value. The NBP forecast CPI to grow only slightly during the next two years, due to a combination of macroeconomic factors, including average food prices in Poland, which dropped in 2014 and 2015. In September of this year, Poland’s CPI stood at negative 0.57 percent.