GUS: inflation in November at 4.7% y/y

Earlier, in a flash estimate, GUS reported that the Consumer Price Index (CPI) was 4.6 percent year-on-year and 0.4 percent month-on-month.

Compared to the previous month, prices increased by 0.5 percent.

Key contributors to November’s CPI were food prices (+0.2 percentage points), transport (+0.13 percentage points), communication (+0.08 percentage points), and housing (+0.05 percentage points).

"GUS indicates that inflation in November rose by 4.7% y/y, driven primarily by a partial unfreezing of energy prices for households (+11.7% y/y). Food prices increased by 4.8%, core inflation was 4.2%. Service prices are rising faster than goods prices (7.2% vs. 3.8%)," stated the Polish Economic Institute in its commentary.

Analysts point out that "according to GUS consumer sentiment surveys, as many as 70 percent of respondents expect prices to rise at a similar pace or slower next year, which should ease inflationary pressure." They also note, "Additionally, the persistent deflation in industrial prices for 16 months will further curb price increases."

"The consensus indicates inflation will peak at the beginning of 2025, with a sustained decline only after Q1. However, the energy price freeze will lower forecasts for the first half of the year, while a full release of energy prices in the fall will push inflation predictions back up," experts commented.

"November inflation was revised to 4.7% y/y. Its decline compared to October is a temporary statistical effect related to fuel prices. However, the drop in CPI inflation is not entirely reassuring. Core inflation increased to approximately 4.3% y/y from 4.1% y/y. Services prices rose by 7.2% y/y compared to 6.7% y/y in October," wrote ING Bank experts.

"In the second half of 2024, a slowdown in the economy will become apparent. Policy restrictions are increasing, along with the need for lower interest rates. Delays in tackling inflation, such as persistently high core inflation, complicate easing. However, there is room for moderate rate cuts in 2025," ING analysts concluded.