Tentative estimations made by GUS show that prices of goods and consumption services fell by 0.8 percent year to year. – Although deflation was commonly expected to die down quickly, it has already become a fixture of Poland’s economic landscape. It is virtually certain that the annual average consumer price index for 2015 will be clearly negative. Slowly decreasing base inflation indices suggest that we are dealing with increasingly broad disinflation processes – comments Łukasz Kozłowski, expert of Employers of Poland.
While month to month prices decreased marginally, this did not lead to lower annual deflation dynamics compared to September. The inflation path lowered due to price cuts in the III quarter. However, we are entering a period when the low statistical basis of the last months of 2014 will be favourable to increased price dynamics.
If the consumer price index maintains a level much below the inflation target, the Monetary Policy Council may consider interest rate cuts. However, it seems highly unlikely that it would decide to take this step as early as on Wednesday, at its next meeting. An important argument in favour of maintaining the current course of monetary policy is the fact that the price decrease is effected largely by external factors. At the same time, the base inflation indices also record lower and lower values.
Łukasz Kozłowski, economic expert of Employers of Poland