Economic Analysis

In today's Eyeopener:

- September core inflation reading due today
- CPI inflation increased to 4.1% y/y in September, 0.1 pp above the preliminary estimate
- Poland's current account balance declined to EUR-3567m in August
- EURPLN exchange rate and Polish government bond yields remain stable

The next two weeks will bring the full set of domestic data releases for September. They will arrive against a backdrop of persistently elevated risk aversion in financial markets (...) Next Wednesday, GUS will release the final September inflation figures. The flash estimate showed inflation at 4.0%, and we expect this reading to be confirmed, while providing more details on the price structure. Core inflation components will be of particular interest, as core inflation likely eased marginally to 3.2% y/y from 3.3% in August. Also on Wednesday, NBP will release the August balance of payments data (...) Abroad, the most important release will be September US inflation data (...)

In September, Polish CPI inflation was 4.1% y/y and 0.7% m/m. This is 0.1pp higher than the preliminary GUS estimate for y/y price growth and in line with the m/m growth reported earlier. The acceleration from 3.4% y/y in August was practically caused by fuel price increase due to both the expiry of the government fuel tax reduction program and the pressure from oil price. Goods price inflation rose to 3.6% y/y in September from 2.5% in August, inflation in services prices eased to 5.3% y/y from 5.6% y/y. We maintain our estimate of September core inflation at 3.2% y/y, while the median of market expectations was 3.1% ahead of the detailed CPI release. The relaunch of the government program to limit fuel price growth in early October should keep headline CPI below 4% y/y in the remaining months of 2026 – we expect this to prevent the MPC from rising interest rates. However, once the program expires, inflation could jump to c.5%. We see average inflation at 3.2% this year and 4.2% in 2027.

The recent data releases were mixed: 2025 GDP growth has been revised up from 3.6% to 3.8%, most real activity indicators in August 2026 disappointed. (…) At the same time, we saw growing evidence of improving economic activity in Western Europe, boding well for Poland’s export and manufacturing. All things considered, at this stage, we see no reason to change our GDP forecast, showing 3.6% growth in 2026 and 3.0% in 2027. On the other hand, the inflation outlook keeps worsening. (...) Our current baseline scenario assumes the expiry of fuel tax cuts in December and mild increases in electricity and gas prices (of around 5%), which lifts CPI to 5% y/y in January and 4.2% on average in 2027.  (…)