Poland Inflation Sees a Decline in May 2023

The National Bank of Poland (NBP) released the latest data on core Poland inflation, providing valuable insights into the country’s economic landscape. Core inflation refers to the measurement of price changes after excluding the impact of food and energy prices. According to the NBP’s report, in May 2023, the inflation rate, excluding food and energy prices, stood at 11.5 percent year-on-year (YoY), while the Consumer Price Index (CPI) for the same period amounted to 13.0 percent YoY.

Major Factors that are Hurting Poland Inflation:

The NBP’s analysis of core inflation indices in May 2023 revealed a decline in year-on-year inflation rates when compared to the previous year. Excluding administered prices subject to state control, the inflation rate stood at 12.1 percent, down from 14.0 percent the previous month. Additionally, the inflation rate, excluding the most volatile prices, decreased to 14.9 percent from 15.3 percent in the previous month. Furthermore, core inflation, excluding food and energy prices, showed a decrease to 11.5 percent compared to 12.2 percent in the previous month. The 15% trimmed mean, which eliminates the influence of the lowest and highest dynamics within the price basket, amounted to 13.5 percent, down from 14.3 percent the previous month.

The NBP calculates four core inflation indices every month, providing a comprehensive understanding of Poland inflation trends in Poland. By analyzing price changes across different segments of the consumer goods basket, these indices help identify the sources of inflation and improve the accuracy of future inflation forecasts. Moreover, they enable policymakers to determine the extent to which inflation is permanent versus being influenced by short-term price fluctuations caused by unpredictable factors.

Among these indices, the most commonly used by analysts is the inflation rate excluding food and energy prices. This indicator focuses on the prices of goods and services that are significantly influenced by the central bank’s monetary policy. Energy prices, including fuel prices, are primarily determined by global markets and can be subject to speculative influences. Similarly, food prices are heavily reliant on weather conditions and the prevailing circumstances in the domestic and global agricultural markets.

The latest data on core Poland inflation in Poland indicates a decline in inflation rates, suggesting a possible easing of price pressures in the economy. By closely monitoring these indices, policymakers and analysts can gain valuable insights into the effectiveness of monetary policies and their impact on various sectors of the economy.

As Poland continues to navigate its economic landscape, the NBP’s ongoing monitoring and analysis of core Poland inflation will play a crucial role in shaping monetary policy decisions and ensuring the country’s economic stability.