Warsaw (Puls Biznesu) – Prices grow very slowly while payments and employments jump. The interest rate decision will be difficult to make.
February inflation rose 0.7 percent on the yearly basis. Since January, the prices have not changed, the central statistical office GUS said. Economists expected higher inflation growth rate.
“0.8 percent increase was forecast. It is not a big difference year-on-year but it may have important psychological influence on financial markets”, Marcin Mrowiec, Bank BPH economist said.
Favorable prices with strengthening zloty may increase the expectations concerning interest rate cutting.
The labor data also proved better than expected. Employment in enterprise industry rose in February 2.5 percent year-on-year while payments grew 4.8 percent.
“This is one of the best results in recent years”, Marcin Mroz, Societe Generale economist commented.
The data may discourage the Monetary Policy Council from cutting interest rates. Higher payments and employment may mean that CPI comes to the target of the National Bank of Poland (2.5 percent with 1 percent twist).
“To MPC, the data will not suggest to hurry with interest rate cuts. Despite low inflation, there are many signs proving that the consumption demand is growing”, Piotr Bielski, BZ WBK economist estimated.