Polish CPI inches down in March

Polish inflation slowed down from 4.7% to 4.6% YoY. This was above the consensus of 4.4%. The statistical office, GUS clarified that prices in many groups were taken in early March i.e. prior to the country going in lockdown. The disinflationary impact of the pandemic is likely to be visible in April data.

Food prices growth accelerated from 7.5% to 8%YoY, slightly above our estimates. Agricultural product markets indicated no rise in wholesale prices, so the increase was probbaly caused by higher demand for necessities in retail stores. Fuel prices took away 0.25pp from the headline – inflation in this group fell from 2.4% to -2.9% YoY.

Based on the statistical offices' numbers, we estimate core inflation rose from 3.6% to 3.7% YoY. Data revealed no significant deviation in leisure and hospitality or clothing prices from their typical seasonal pattern despite trade in those groups effectively ceasing during the lockdown.

The full extent of price drops should become visible in April or perhaps even later, as the GUS computes them based on the regular seasonal pattern, so long as activity isn’t back to normal.