KBC Market Research Desk
KBC Bank
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Inflation pressures low in the Czech Republic and Poland
Polish industrial output and retail sales in focus
Inflation pressures remain subdued in Central Europe. In June, core inflation surprisingly dropped 0.1 % month-on-month in Poland and the producer price index dropped 0.2 % in comparison to its May reading in the Czech Republic. Moreover, we may expect a similar (i.e. rather low) PPI growth in June to be reported later this afternoon from Warsaw. It has obviously been very hard to encounter inflation pressures in the CEE economies when external (Euro-zone) inflation has been muted exchange rates stable and global commodity prices under downward pressure...
Low inflation expectations in Poland have been mirrored in slow growth of nominal wages as confirmed by the June wage report. According to the data release, nominal wages grew by a mere 2.5 % y/y in Poland in June. At the same time, though, owing to negative inflation, real wage growth stood above 3 % annually, which should sufficiently support domestic demand and the economy as a whole. The positive conclusion should be confirmed by today’s series of hard Polish data, including industrial and construction output together with retail sales for June.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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