GUS: Inflation in November at -0.6% y/y

GUS revealed that the biggest contributors to month-on-month deflation were food prices, which overall fell by 0.4 percent from October and translated into 0.08 percentage points of the fall in the price index.

However, experts largely agree that the period of deflation is likely to end in the near future and 2016 should see a return of inflation. The government’s budget for 2016 foresees inflation at 1.7% over that year.

Meanwhile, analysts from BZ WBK have forecast that year-on-year CPI inflation will be around -0.5 percent in December 2015, and around 1 percent by December 2016. They also expect that deflation will remain for at least the next two months.

“If one were to look at the components of the inflation indicator then it would become clear that the majority of prices are actually gradually rising, if at a very slow pace,” commented Roman Przasnyski, chief analyst of Gerda Broker.

“The price of food in November was only 0.2 percent higher than a year ago.

“The largest rise was in the prices of goods and services related to health care, which went up by 2.6 percent [y/y]... For most of the remaining goods and services there were only symbolic price rises.”

Przasnyski added that a global fall in crude oil prices is likely the main factor behind Poland’s prolonged deflation, with fuel 12.8 percent cheaper in November than a year ago. (sl/nh)

Source: PAP