Time will tell whether the Polish central bank (NBP) is correct with its strategy or not. The data on core inflation gives reason to question this, in the opinion of economists at Commerzbank.

Core rate illustrates that price pressure remains high on a broad basis

“It is quite possible that the overall rate might have peaked. However, the core rate, in particular, illustrates that price pressure remains high on a broad basis, regardless of energy and food prices, and that this is unlikely to change anytime soon.”

“We will only find out in a couple of months’ time whether the NBP’s reliance on falling inflation rates in 2023 is founded and whether real interest rates will rise into less negative territory. If that is the case, the Zloty should be able to appreciate. If not, things look rather worse for the NBP’s credibility and the Zloty.”