Up to three times art. Credit Agricole with interest rate reduction

The Monetary Policy Council will reduce interest rates three times – once in November this year. and twice in 2026 – forecasts Bank Credit Agricole in a commentary to GUS data. The reduction cycle will end when the NBP main interest rate, reference rate, drops to 4 percent. He added.

On Monday, the Central Statistical Office said that inflation in August amounted to 2.9 percent. In an annual basis, counting the month has not changed. In quick respect, the Central Statistical Office reported that inflation in August amounted to 2.8 percent. In an annual basis, and a month to a month fell by 0.1 percent. In July, inflation was 3.1 percent. year on year.

“Lower base inflation had the strongest in the direction of reduction of inflation, which, according to our estimates, decreased in August to 3.2 percent compared to 3.3 percent in July. Its decline resulted from a lower price dynamics, among others in terms of” other expenses for goods and services “,” recreation and culture “,” household and running a household “and” transport) ” He compensated clearly higher price dynamics in the “Communications” category (effect of increasing the price of mobile telephony services) ” – pointed out economist Credit Agricole Jakub Olipra.

He added that a slightly lower price dynamics in terms of “fuel” (-7.7 percent against -6.8 percent) and “energy carriers” (2.3 % compared to 2.4 percent), which in total reduced the inflation by approximately 0.06 points, also contributed to the decrease in inflation. percent Price dynamics in the category “Food and non -alcoholic drinks” did not change in August compared to July and amounted to 4.9 percent.

He estimated that in a monthly basis the base prices increased in August by about 0.2 percent. month to month, and thus their dynamics was formed above the seasonal pattern (0.0 % m/m), which indicates the persistent increased inflation pressure. He considered a disturbing fact that the high dynamics of services prices (6 % y/RW of August compared to 6.2 percent in July), while the dynamics of the prices of goods is clearly lower (1.7 percent against 1.9 percent) and has remained in recent months in a clear inheritance trend. Economist Ca estimated that the main pro -inflation factor in services is weakening, although still relatively strong pay pressure. In his opinion, the nominal salary dynamics in the national economy will decrease in Q3 to 7.5 percent. In an annual basis against 8.8 percent in Q2 and 10 percent in I KW.

“We maintain our forecast according to which the average annual CPI inflation will amount to 3.7 percent y/rw 2025 in compared to 3.6 percent in 2024, in 2026. It will drop to 2.9 percent. Simultaneously throughout the horizon of our forecast (i.e. until the end of 2026) inflation will form in the inflationary of the NBP inflation (2.5 percentage of 1 percentage point). – Olipra informed.

Bank economists believe that the prospect of shaping inflation in the compartment of deviations from the inflation target will be an argument for the MPC with further mitigation of monetary policy. “We expect that after getting acquainted with the results of the November projection, the MPC will again reduce interest rates by 25 pb. We think that subsequent interest rate reductions will take place in March and May 2026 (25 PB each) and they will end a series of monetary policy soothing with a reference rate of 4 percent.” Olipra told. (PAP)

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