Polish Inflation in May: Mixed Trends in Price Changes

Preliminary data for May 2024 confirm a year-on-year inflation rate of 2.8% in Poland, consistent with estimates but slightly below the market consensus of 2.8%. This follows an inflation rate of 2.4% in April and 2% in March.

The Central Statistical Office reported that several categories had a significant impact on the overall consumer inflation rate in May compared to April. Higher prices were observed in food (up 0.3%), restaurants and hotels (up 0.9%), health (up 0.9%), and alcoholic beverages and tobacco products (up 0.5%). These increases contributed to the overall inflation rate by 0.08, 0.05, and 0.03 percentage points, respectively. In contrast, prices fell in recreation and culture (down 1.4%), transport (down 0.4%), and clothing and footwear (down 0.4%), reducing the overall inflation rate by 0.09, 0.04, and 0.02 percentage points, respectively.

Year-on-year, prices for restaurants and hotels surged by 7.9%, housing by 1.6%, and food by 1.3%, significantly contributing to the overall inflation rate. Meanwhile, clothing and footwear prices dropped by 0.2%. Among food items, cold cuts rose by 4.5%, meat by 1.9%, and bread by 4.9%. However, prices for rice, pork, poultry, and eggs fell by 3%, 2.7%, 4.2%, and 3.7%, respectively.

The National Bank of Poland (NBP) will release data on core inflation (excluding food and energy prices) on Monday, providing further insights into underlying inflationary pressures. Overall, the May 2024 inflation data for Poland show a mixed picture, with notable price increases in some sectors and decreases in others, reflecting the complex nature of inflation dynamics.

Implications for Banking and Business

Developments in the Polish banking sector affect businesses operating in the country in several ways. Access to corporate banking services, credit availability, deposit rates, and payment infrastructure are all critical factors for companies — whether established Polish firms or foreign-owned entities entering the market.

For foreign entrepreneurs setting up operations in Poland, choosing the right banking partner is a strategic decision. Major Polish banks including mBank, ING Bank Śląski, Bank Millennium, PKO BP, and Santander Poland offer varying levels of service for international clients, including English-language online banking, multicurrency accounts, and dedicated relationship managers for corporate clients.

The Polish banking market is well-regulated by the KNF (Financial Supervision Authority) and participates in the EU deposit guarantee scheme (BFG — Bank Guarantee Fund), providing deposit protection up to EUR 100,000 per depositor per institution. This regulatory framework provides stability and confidence for businesses maintaining corporate funds in Polish banks.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our bank account opening services, or contact us for a free consultation.