Bloomberg News

Polish February Price Growth Exceeds Economist Forecasts

March 13, 2012

Polish consumer prices rose faster than economists forecast in February as growth in the European Union’s biggest eastern economy outpaces government projections.

Inflation was 4.3 percent, compared with 4.1 percent in January, the Central Statistical Office in Warsaw said today. That’s more than the 4.2 percent median estimate of 28 economists in a Bloomberg survey. Prices advanced 0.4 percent from the previous month.

The Narodowy Bank Polski left its benchmark interest rate at 4.5 percent for a ninth month on March 7. The inflation rate is falling “too slowly” to satisfy rate setters, Governor Marek Belka told the Rzeczpospolita newspaper in an interview published today. Price growth has exceeded the 3.5 percent upper limit of the bank’s tolerance range since January 2011.

Today’s data reinforce the bank’s increased 2012 inflation projection, published yesterday, Monika Kurtek, chief economist at Bank Pocztowy in Warsaw, said by phone. “Taming inflation won’t be easy,” especially after “base effects disappear.”

The zloty fell to as low as 4.131 per euro after today’s report from 4.113 before it was released. The data “came as expected,” the Finance Ministry said in an e-mailed statement. Inflation will slow to less than 4 percent next month, it added.

Prices will rise 4.1 percent this year, according to the central bank’s revised inflation outlook, 1 percentage point more than a projection it made in November.

The prospects for inflation this year have “significantly worsened,” monetary-policy maker Elzbieta Chojna-Duch said in a March 10 interview, adding that high prices and concerns over how much the economy will slow justify maintaining a “wait-and- see” bias with regard to rates.

February inflation was driven by a 4.5 percent gain in food prices and a 17.2 percent increase in retail fuel costs.

The figures support the view that “interest-rate cuts aren’t possible in the coming months,” said Jaroslaw Janecki, chief economist at Societe Generale SA in Warsaw.

To contact the reporter on this story: Katya Andrusz at Dorota Bartyzel in Warsaw

To contact the editor responsible for this story: Balazs Penz at

The Good Business Issue
blog comments powered by Disqus