Poland Macro Weekly: Limited boost to inflation from energy price increases

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  • Current account surpluses prevail in the CEE (p. 2) – Improvement in the external balance of the CEE economies continued in early 2024, although the support coming from the reversal of negative price effects has started to gradually fade away.


  • Polish government presented a proposal to increase a maximum electricity price for households (starting from July) by 21%, to 500 PLN/MWh from 412 PLN currently in force. Price of electricity constitutes approx. 50% of the electricity bill, hence the proposal translates into the bill rising by 10-13%. Under the assumption of unchanged prices for the rest of the components of the energy carriers the proposal would boost inflation by 0.5-0.6pp. In such a scenario we estimate that CPI inflation at the end of the year would not exceed 5% (see chart below), against the scenario of an increase above 8% assumed by the NBP in its most pessimistic scenario.
  • CPI inflation in March was revised slightly upwards to 2.0% from 1.9% (flash estimate) and it is likely to be the lowest reading in 2024. Core inflation fell to6% y/y from 5.4% y/y in February (therefore outcome for 1q24 was 0.2pp lower than indicated by the latest NBP projection).
  • Consumer confidence improved further in April (-11.5pts vs -12.3pts in March), although consumers signaled growing concerns about the future. Consumer inflation expectations for the next 12 months rose – in particular the percentage of consumers expecting faster price hikes rose, which might reflect the decision to bring back higher (5% vs 0%) VAT rate on food in April.


  • We expect that a set of data for March due the week ahead (details in the calendar on p.4) will confirm our view that economic activity rebounded in 1q24. However, significantly negative calendar effects have likely driven down industrial and construction output in March (our estimates are below consensus). Wage growth is widely expected to remain double-digit, with our forecast slightly below the median.


  • 6.3 bn (EUR) – recent payment received by Poland under the RRF, the highest single payment of the European funds during Poland’s membership in the EU.

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