Poland's August Inflation Overshoots Forecasts on Fuel Costs
Polish inflation hit 3.4% in August, exceeding forecasts, as fuel prices jumped 24.2% annually. Analysts now expect rates to stay unchanged through 2026.
Poland's consumer price inflation accelerated more than expected in August, driven primarily by a sharp increase in fuel costs. The annual inflation rate reached 3.4%, surpassing the 3.1% forecast by analysts. On a monthly basis, prices rose by 0.4%, also above the anticipated 0.2%.
The main driver was fuel prices, which surged 24.2% year-on-year and 5.2% month-on-month. This spike followed the government's decision to end its fuel price control program. Although authorities reduced VAT rates on petrol and diesel in the latter half of August, this measure was insufficient to fully offset higher global commodity prices.
Looking ahead, analysts project inflation will continue its upward trajectory, potentially reaching around 4.0% by the end of 2026. This outlook significantly reduces the scope for monetary easing by the National Bank of Poland. Analysts at Pekao Bank stated that no interest rate cuts are expected in September or for the remainder of the year. The Monetary Policy Council is scheduled to meet on September 8-9.
Separate data released on Monday confirmed that the Polish economy maintained solid growth in the second quarter. Gross domestic product expanded by 3.9% year-on-year, slightly above the earlier estimate of 3.8%. This growth was supported by a significant acceleration in investments, which rose by 8.4% compared to 2.4% in the first quarter. ING analysts noted the economy's resilience despite geopolitical tensions in the Middle East.