Central Statistical Office: inflation is falling, but still remains above the NBP inflation target

Inflation in May was only 2.9 percent in annual terms. This is the preliminary data of the Central Statistical Office. This is the lowest level of this [...] https://www.pinterest.com/pin/1085437947660215829/

Inflation in May was only 2.9 percent in annual terms. This is the preliminary data of the Central Statistical Office. This is the lowest level of this indicator in 2020. Expectations vs. reality This is optimistic information, because analysts expected the annual inflation rate to fall to 3 percent, compared to 3.4 percent in April, 4.6 percent in March and 4.7 percent in February. In the latter month, the result was the highest since November 2011. In contrast, it is now falling to the lowest level since the beginning of the year. In fact, we are back to the state of the second half of 2019. On a monthly basis, on the other hand, inflation in May was -0.2% compared to -0.1% in April. CSO and inflation: detailed data However, we should remember that this is the so-called "quick estimate". The final figures will probably change, although it is doubtful that there will be any dramatic jumps or declines. On the pessimistic side, however, we have to say that the prices of food and non-alcoholic beverages rose significantly (by as much as 6.1 per cent). Energy carriers became more expensive by 5.2 per cent, while fuels decreased by 23.4 per cent. Compared to the previous month, the increase in prices of food and non-alcoholic beverages amounted to 0.1 per cent. In turn, fuels decreased by 4.5 per cent and energy carriers by 0.1 per cent. "It is worth mentioning that inflation in 2020 is calculated according to a weighting system based on the 2019 household budget survey. The previous update was made by the CSO in March 2020. However, the current "pandemic" structure of Poles' spending differs strongly from that of a year ago - spending in some categories (transport, clothing and footwear, recreation and culture, restaurants and hotels) has fallen sharply, while in others (food, health) it has risen sharply" - explains Michał Żuławiński on bankier.pl. Another worrying piece of information is that the April result is still higher than the National Bank of Poland's inflation target, but at the same time - and this is the light at the end of the tunnel - it remains within the accepted band of deviations. The NBP defines it as an increase in CPI inflation by 2.5 per cent, with an acceptable deviation of one percentage point either way. However, we should remember that we still have no reason to open the champagne... Tags GUS inflation pln