Page 39 - bne_Magazine_July_2017

bne July 2017 Special focus I 39
Polish core inflation eases in May
Polish core inflation gained 0.8% y/y in May, the National Bank of Poland (NBP) announced on June 13.
The reading – which is 0.2pp below market expectations and 0.1pp lower compared to April – shows core inflation slowing after four months of acceleration. That will only strengthen the Monetary Policy Council's policy stance to resist any rate hike for the foreseeable future.
Poland inflation CPI vs PPI
Inflation: CPI y/y Inflation: PPI y/y
Core inflation has come into focus across the region as central banks have insisted that the recent surge in headline inflation is driven by erratic commodities markets and the low base in 2016. The headline CPI reading in Poland remained relatively subdued at 1.9% y/y in May, driven by price growth in the foods and fuels segments.
OECD raises 2017 growth forecast for Poland
Joining the majority of analysts, the Organisation for Economic Cooperation and Development (OECD) raised
its 2017 forecast for Polish economic growth to 3.6%, the institution revealed in its latest economic outlook on June 7.
The 4% surge in the Polish economy in the first quarter of 2017 has promoted the revision of forecasts almost across the board. The OECD notes that its upgrade comes on the back of accelerating domestic demand and recovering public
Poland GDP y/y (quarterly)
GDP y/y
investment – despite the latter's disappointing performance in January-March.
The organisation forecasts that public investment – which continued to fall in the first quarter, albeit at a slowing rate – will pick up as the use of EU funds improves. Private investment is expected to follow suit, supported by strong business sentiment and low real interest rates, the report suggests.
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GDP y/y %
Inflation y/y %