Poland Macro Weekly: Inflation Saga

TOP MACRO THEME(S):

Energy, Food, and Fluctuations: Inflation acceleration in majority of the CEE economies in November was primarily driven by rising food prices and base effects related to energy prices. Inflation declined only in Poland due to significant fluctuations of fuel prices in autumn 2023.

WHAT ELSE CAUGHT OUR EYE:

Poland’s current account in October had a surplus of EUR 1.06bn vs a deficit of EUR 1.43bn in September. Exports (in EUR) grew by 1.5% y/y and imports by 6.6% y/y, weaker than expected. On a 12m basis, the current surplus has narrowed to 0.3% of GDP and, in our view, it will turn into a deficit after the new year. The deterioration in current account results from s a worsening trade balance in goods (negative since May) and reduced surplus in trade in services.
Approximately 90% of the EU funds under Poland's national recovery and resilience plan are now available in calls for proposals, with around 35% of the grant allocation already contracted, according to the Minister of Development, Funds and Regional Policy K.Pelczynska-Nalecz.
At the end of 3q24, the number of job vacancies in Poland stood at 114,300, representing a 2.8% increase compared to the corresponding period of 2023. The vacancy rate rose to 0.93%. Regionally, it was the highest in the Warsaw Capital Region (1.23%) and the lowest in Podlasie (0.43%). The highest job availability (or the deepest labour force shortage) was in the construction sector (vacancy rate of 1.80%), while the lowest was in education (0.51%).
Steering Committee of the National Working Group for the interest rate reference indicator reform has selected the WIRF index as the target benchmark to replace WIBOR. The final name of the index will be determined after further work.

THE WEEK AHEAD:

We expect industrial and construction output in November to remain relatively weak, partly due to the unfavourable working days effect. On a positive note, we expect retail sales to continue rebounding (see the calendar for details).

NUMBER OF THE WEEK:

1.2 million – number of foreigners registered in ZUS (Social Security Fund) at the end of November, the highest on record and up by 5.8% y/y.