Today’s data did not bring any surprises when it comes to CPI inflation for July. Economists are wondering if we’ll have a single-digit reading next month. mBank experts are skeptical, and according to representatives of Pekao, the situation will be “on the edge of a knife”.
The Central Statistical Office (GUS) presented today the final data on CPI inflation in July. It amounted to 10.8 percent. on a year-on-year basis. These data are in line with the so-called a quick reading presented at the end of July.
Inflation in July
Prices of consumer goods and services in July 2023, compared to the same month last year, increased by 10.8 percent. (the prices of services increased by 11.3%, and the prices of goods – by 10.6%). Compared to the previous month, the prices of goods and services decreased by 0.2 percent. (including goods – by 0.6 percent with an increase in the prices of services – by 0.8 percent).
In July this year compared to the previous month, the greatest impact on the total consumer price index had lower prices for food (by 1.3%) and clothing and footwear (by 3.1%), which decreased this index by 0, 34 percentage points and 0.13 percentage points Higher prices in recreation and culture (by 1.6%), housing (by 0.2%) and restaurants and hotels (by 0.7%) increased the index by 0.10 pp, 0 .05 p.p. and 0.04 percentage point
Comments on today’s data are dominated by opinions that they are not a surprise. Experts are also wondering whether in a month we will have a single-digit reading and therefore the Monetary Policy Council (RPP) will decide to cut interest rates. – August still promises to be on a knife edge (very close to 10% y/y) – Pekao economists forecast.
Inflation below 10 percent. it will not?
According to mBank experts, inflation in August will not fall below 10 percent. The reason is fuel and food prices. – There was no surprise – the Central Statistical Office confirmed that inflation in July amounted to 10.8% y/y. This means that on a monthly basis prices decreased by 0.2%. We believe that inflation will not be able to slow down below 10% in August, mainly due to fuel and food prices, emphasize the bank’s economists.
ING experts write about the drop in inflation due to food. – The decrease in inflation is mainly due to food (subtracted 0.6pp) – we read in a comment posted on Twitter.
The bank’s experts predict that interest rate cuts of 50-75 basis points will take place this year.