Investing.com -- Poland’s inflation rate declined to 3.1% year-over-year in May, falling short of expectations and potentially allowing the National Bank of Poland to postpone interest rate increases.
The figure came in below both consensus forecasts and analyst predictions of 3.6%, and marked a decrease from April’s 3.2% reading. The surprise drop suggests underlying price pressures in the Polish economy are weaker than previously anticipated.
Energy costs continued to climb, with motor fuel inflation reaching 12.4% year-over-year, up from 8.4% in April. Household fuel inflation also increased to 5.0% from 4.6% during the same period.
These gains were counterbalanced by a sharp slowdown in food inflation, which fell to 0.5% year-over-year from 1.9% in April. Core inflation remained stable at approximately 3%, according to estimates.
The central bank’s Monetary Policy Committee is scheduled to meet in July, when new inflation forecasts will be released. The June flash inflation reading will be available before that meeting.
Prior to the May data, expectations had been building that the National Bank of Poland would begin a monetary tightening cycle, likely starting at the July meeting.
The softer inflation print, combined with the possibility of a deal to end the Iran conflict, may provide policymakers with justification to maintain current interest rates.
The central bank’s decision will likely depend on whether the June inflation data shows any sharp increases.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
AI computing powers are changing the stock market. Investing.com's ProPicks AI includes dozens of winning stock portfolios chosen by our advanced AI. Our flagship Tech Titans strategy doubled the S&P 500 within 18 months, including notable winners like Super Micro Computer (+185%) and AppLovin (+157%). Which stock will be the next to soar?