Basic inflation, excluding energy, fuel and food prices in Poland in May 2025. 3.3 percent. year on year – the National Bank of Poland said on Monday. This is the lowest level since January 2020.
This means a lowering of the base inflation rate from 3.4 percent. recorded in April and 3.6 percent In March (the record in this cycle fell on March 2023, when it was as much as 12.3 percent). The May reading is more or less compatible with the forecasts: economists pointed out that the result in the range of 3.2-3.3 percent is possible.
Other measures of the base inflation are also falling
Basic inflation in a monthly basis fell by 0.1 percent. month to month. – This is the first such case in 2025 and only the fourth in the past five years, under the sign of the powerful, global disposal of price processes through Pandemia and then war – comments Bartosz Sawicki, an analyst of Exante.
NBP also stated that base inflation after excluding the administrated prices in May amounted to 2.5 percent. year to year, i.e. fell from 2.7 percent. in April. The indicator after turning off the prices of the most variables reached 4.6 percent, which is the same in the previous month. Basic inflation calculated by the 15 % cut average method dropped to 3.8 percent. with 3.9 percent in April.
The base inflation calculated by the NBP in its most popular variant does not take into account the prices of energy, fuels and food, which are largely determined in international markets (or which are largely affected by regulations) and on which the central bank has less influence. This measure better illustrates internal inflation pressure and is crucial for the decision of the Monetary Policy Council in the field of interest rates.
NBP himself explains that this measure allows better identification of inflation sources and forecast its future tendencies more accurately. “It also allows you to determine to what extent the inflation is permanent, and in which it is shaped, e.g. by short -term changes in prices caused by unpredictable factors,” says the central bank.
The Monday publication of the NBP is another good data in the field of inflation: on Friday the Central Statistical Office said in the final reading that the consumer inflation rate (so -called CPI) in May fell to equal to 4 percent. year on year. This means a slightly lower reading than forecasts and a reduction in inflation from 4.3 percent. year to year recorded in April and 4.9 percent in each of the first three months of this year. Inflation of service prices dropped to 6 percent. year on year with 6.3 percent in April, and goods up to 3.3 percent year to year with 3.5 percent in April.
Economists forecast that from July the consumer inflation rate may be permanently for the NBP (it is 2.5 percent +/— 1 percentage point). This means creating conditions for further – after the May cut by 0.50 percentage points. – interest rate discounts. Currently, after a pause in June, the reference rate is 5.25 percent.
When is the interest rate reduction?
-In the third quarter, when the strong effects of the base related to last year's dismantling of protection activities in the field of energy prices occur and the new gas tariff will come into force, will approach 2.5 %. NBP target. The latest information illustrating price pressure in the Polish economy speak for the continuation of interest rate reductions by the Monetary Policy Council – says Sawicki.
He adds that the July reduction can stand on the blade of the knife and this despite the fact that the new NBP projection will probably indicate the inflation path and faster achievement of the target. The reason is the change in the MPP attitude.
– The June pause was accompanied by a clear exacerbation of rhetoric. The president of the NBP, Adam Glapiński, during an exceptionally short conference, managed to emphasize the threats related to the URE decision on electricity prices and loose fiscal policy several times. Both question marks will disappear only after the holidays. For a new argument, which speaks for summer abstinence in the continuation of the loosening of monetary policy, some MPP members may recognize the conflict in the Middle East, which will squeeze a mark on fuel prices – adds Sawicki.
Hastrzębi RPP reimbursement meant that from the valuation of cuts to the second half of the year evaporated 0.25 percentage points. reduction of money cost. Currently, for the next two quarters, the money market assumes two full discounts of 0.25 percentage points. Each. The implementation of such a scenario would bring a reference foot to 4.75 percent.
