December inflation was below expectations

opublikowano: 16-01-2007, 15:22

Warsaw (Puls Biznesu) – Inflation stopped although it was supposed to grow. Interest rate increases will be postponed.

Warsaw (Puls Biznesu) – Inflation stopped although it was supposed to grow. Interest rate increases will be postponed.

The CPI rose in December 2006 against December 2005 by 1.4 and not by 1.6 percent as expected. In comparison to November, the prices fell 0.2 percent, the central statistical office GUS said. Economists agree that the inflation data mean that interest rate increases will come later than expected. The surprising results were possible thanks to food and fuel prices which fell against November.

“The current data let expect that even the GDP growth of 6 percent in the fourth quarter of last year may not be reflected in the prices. This is very good news for inflation”, Marcin Mroz, Fortis Bank chief economist commented.

Michal Chyczewski, Bank BPH economist is more cautious. In his opinion, food and fuel prices may surprise the market again but negatively.

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