Polish inflation hit all-time low
Hungary plans early repayment of IMF loans
Polish June inflation came out more or less in line with our expectations. The year-on-year inflation further slowed to hit its all-time low at 0.2 percent. On the month-on-month basis, prices stagnated (we expected an 0.1 % decrease; the biggest surprise was the 0.4 % rise in transport prices). Although inflation stays markedly below the level targeted by the central bank (2.5 percent with a tolerance band 1 percentage point wide in each direction) we do not expect the NBP to respond but rather to keep its key rate at the all-time low of 2.5%. We think that inflation hit its rock bottom in June. Nevertheless, the planned reduction of retail energy price might keep inflation below 0.5% y/y throughout this summer.
Read the full report: FX Daily
KBC