Poland's consumer price index inflation rate was 1.7 percent in January in year-on-year term, statistics office GUS said. When compared to December 2012, the CPI figure was 0.1 percent. Economists surveyed by PAP had expected y/y CPI to be 2 percent and the month-on-month figure to be 0.2 percent. The prices of food and non-alcoholic beverages rose the most – by 3.5 percent y/y. The prices of clothing fell by 4.9 percent and transportation prices fell by 0.7 percent.

“This decline was underpinned by one-off factors (cuts of gas and communication prices), but primarily it is an effect of general lack of inflationary pressure given weak economic growth. This conclusion is supported by the low level of core inflation, which, according to our estimates, amounted to about 1.5%,” economists from bank BZ WBK wrote in a comment. “The inflation figure is a strong argument for another rate cut in March,” they added.

KW