EMEA Economic Comment "Poland: Inflation continues to undershoot..."

Research evidence excerpt

EMEA Economic Comment "Poland: Inflation continues to undershoot..."

Global Research

30 June 2026ab

EMEA Economic Comment Economics

EMEA EmergingPoland: Inflation continues to undershoot

expectations Anna Zadornova

Economist

anna.zadornova@ubs.com

+44-20-7567 4212

Inflation declined back to target in June, on lower food and fuel prices Nimrod Mevorach

Preliminary data showed consumer prices declined by 0.5% m/m in June, bringing the Strategist

headline y/y inflation down to 2.5%, from 3.1%y/y in May, below Bloomberg consensus nimrod.mevorach@ubs.com

+44-20-7567 0779

and our forecast of -0.3%m/m, 2.7%y/y. The downside surprise was once more driven

by a fall in food prices (-0.7% m/m; -0.3% y/y), which shaved off 21bps from the

headline CPI print, on our calculation. Car fuel prices fell by 7.4%m/m, reducing the

headline by another 37bps. Energy prices were down 0.4% on the month, most likely

also linked to the recent drop in global oil prices. We estimate that core inflation likely

was more sticky, declining to 3%y/y from 3.1% in May.

MPC on hold next week, focus on new forecasts

With inflation undershooting expectations for two months in a row and global oil prices

back near February levels, the MPC should fell well justified keeping the rates on hold.

We expect that debate at the July MPC meeting to shift to whether there is room to

complete the rate-cutting cycle at some point in the future or if the current level of policy

rate of 3.75% is justified in the longer term. The MPC will need to take into the account

that inflation will be pushed 0.5-0.6pps higher once the VAT on fuel is restored to 23%.

The current legislation keeping VAT at reduced 8% rate is expiring at the end of the

month, but at the time of writing the government has not announced that the VAT will