Poland's annual inflation rate in September remained at 3.8 percent y/y, the same rate as in August, the Central Statistical Office said on Monday. The figure was below market forecasts of around 4.0 percent. Prices increased by 0.1 percent m/m, following a 0.3 percent decrease in August.
“Today's figures are a clear signal that prices have reacted to the decline in domestic demand,” wrote Ignacy Morawski, chief economist at PBP Bank, in an e-mailed statement.
“By October inflation will be within the [central bank's] inflation target range [1.5-3.5 percent]. And by the spring of 2013, it should reach the middle, which is 2.5 percent,” he added.
Mr Morawski explained that low wage growth, stagnating domestic demand and the global economic slowdown will continue pushing inflation downward.
Monday's inflation figures were yet another argument for the rate-setting Monetary Policy Council (RPP) to cut interest rates, economists said, with the market consensus being that it will do so at its next meeting in early November.
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