Bloomberg News

Polish Inflation Accelerates From Five-Month Low on Gas, Alcohol

January 15, 2014

Polish inflation undershot the official target for a 13th month, reinforcing the central bank’s vow to keep interest rates at a record low through at least June.

Consumer prices rose 0.7 percent from a year earlier in December, accelerating from a 0.6 percent gain the previous month, the Warsaw-based statistics office said today. The figure matched the median estimate in a Bloomberg survey of 34 economists. Prices rose 0.1 percent from November.

Growth in the European Union’s largest eastern economy may “slightly” exceed forecasts this year, while the inflation rate will be “somewhat lower,” central bank Governor Marek Belka said last week as policy makers left borrowing costs at a record 2.5 percent for a sixth month. Consumer-price growth won’t reach the 2.5 percent goal until 2015, the bank predicts.

Inflation last month was stoked by an increase in natural gas tariffs and higher excise duties on alcohol, Marcin Mrowiec, chief economist at Bank Pekao in Warsaw, said by phone before the release. “As a consequence, inflation may accelerate to close to 1.5 percent in the first quarter.”

The zloty traded at 4.1604 per euro at 2:05 p.m. in Warsaw, paring its loss from yesterday’s close to 0.4 percent. The yield on five-year government notes was down four basis points at 3.53 percent.

Gross domestic product may rise by about 3 percent this year, while in 2015 “there’s an opportunity for economic growth to return to a faster track, similar to 2010 or 2011 -- in other words well above 3%,” Polish Finance Minister Mateusz Szczurek said Jan. 9 in Warsaw.

The economy’s improvement means the central bank’s next move will be a rate increase, according to Belka.

To contact the reporter on this story: Dorota Bartyzel in Warsaw at dbartyzel@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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