Poland's core inflation slightly down in June, new NBP data shows

Poland's core inflation saw a slight decrease in June, reaching a level consistent with economists' average forecasts. This key indicator, which excludes volatile food and energy prices, aims to reveal the underlying inflationary trend within the economy.

The easing was partly driven by a slowdown in service price dynamics, which dropped from 5.7% year-on-year in May to 5.4% in June. Durable goods also experienced a more pronounced price decline, with household appliances falling by 4.5% year-on-year, the steepest drop this year. Car prices decreased by 7.2% year-on-year, and recreational goods saw a significant price reduction of 9.4% year-on-year. Passenger transport services also reversed their trend, showing a 2.5% decrease in June after a nearly 6% rise in May.

However, persistent inflationary pressures are evident in other sectors. Costs associated with maintaining housing, including rent and utilities like cold water and waste disposal, saw accelerated price growth, reaching 2.4% year-on-year. Services related to healthcare and education also remain stubbornly high, with annual price increases of 6-7% and 6% respectively.

Despite a recent oil price shock, its impact on broad inflation in Poland has been limited, primarily affecting specific categories such as air and organized tourism transport. This suggests that conditions are not currently conducive to a widespread price shock. The moderating wage growth, around 5.5-6% in recent months, is the lowest in five years, further indicating a contained inflationary environment.