In theory, Poland joins the group of emerging markets that are beginning to unwind, but it is very different from them: Core inflation is falling more slowly than other Central European countries, while LATAM economies led real rates first. to very positive levels before launching its easing cycles.
In the near term, headline inflation should continue to decline, but the medium-term outlook is more uncertain. The decline in inflation is largely due to the easing of the earlier energy shock, but the slowdown in core inflation has been slow. Therefore, in our opinion, it is not clear that inflation will continue to decline towards the GNP target in the medium term. The labor market remains tight, putting upward pressure on wages. Fiscal policy also remains expansive. In this context, we consider the Council’s decision to be risky from the point of view of restoring price stability in the medium term.