Preliminary estimate of inflation in Poland for December 2022

According to the flash estimate, inflation in December 2022 amounted to 16,6% (17,5% in November 2022), with much higher market expectations of as much as 17,3%. This is the second consecutive decline in the annual change in inflation - which is a positive sign, but inflation may return to above 18% in a moment, and it is already one of the highest in Europe.

Energy prices are falling

We owe the decline in the annual inflation dynamics mainly fall in the prices of energy carriers (monthly change in December is -3,3% and a decrease in annual dynamics from 36,8% in November to 31,2% in December), and fuel prices for private means of transport (monthly change in December is -1,6% and decrease in the annual dynamics from 15,5% in November to 13,5% in December).

Similarly, food prices slightly deducted from the annual inflation dynamics in December (when the annual dynamics of food prices changed from 22,3% in November to 21,5% in December).

We estimate core inflation at ca. 12,1% year-on-year (an increase from 11,4% in November and this is another 'hill' of core inflation in this cycle). Therefore, the core inflation added to the change in the annual inflation dynamics by about 0,3 percentage points, but definitely less than the total of energy carriers and fuels for private means of transport (which together subtracted about 0,9 percentage points from the annual dynamics).

No anti-inflation shield

The decline in the annual inflation rate is a positive sign, but we still have to face increases in gas and electricity prices and the possible effects of the exclusion of the anti-inflation shield in December 2022, which in total will boost the annual inflation rate even above 18% in the first months of 2023.

W.1 Annual change of the indicator prices of consumer goods and services (inflation) and core inflation in Poland. Source: own study, Central Statistical Office

Month-on-month inflation rose by 0,2%, the lowest since February 2022.

W.2 Monthly change of the indicator prices of consumer goods and services (inflation) and 6-month moving average (monthly change) in Poland. Source: own study, Central Statistical Office

We estimate the increase in core inflation at around +0,6-0,7% in December 2022.

W.3 Monthly Changes core inflation (only food and energy prices) and 6-month moving average (monthly change). Source: own study, NBP

Prices "food and non-alcoholic beveragesin the flash estimate, they rose 1,4% in December 2023 - more than following the long-term seasonal pattern. The long-term average monthly change of this series in December is only +0,55%.

W.4 Monthly series change Food and non-alcoholic drinks in 2022 against the average path for 2000-2021 (seasonal pattern). Source: own study, Central Statistical Office

The Central Statistical Office also provides a quick estimate of changes in the prices of "Energy carriers" and changes in the prices of "Fuel for private means of transport". "Energy carriers” (i.e. electricity, gas, fuel (coal), thermal energy) in the flash estimate fell in December 2022 by -3,3% compared to November, and the annual change was 31,2%.

W.5 Monthly Price Change Energy carriers, and a 6-month moving average (monthly change). Source: own study, Central Statistical Office

W.6 Annual price change Energy carriers against the background of the annual change of the entire inflation basket. Source: own study, Central Statistical Office

"Fuels for private means of transport(i.e. mainly diesel oil and gasoline) in a flash estimate fell by 2022% in December 1,6 and the year-on-year change was 13,5%.

W.7 Monthly Price Change Fuels for private means of transport, and a 6-month moving average (monthly change). Source: own study, Central Statistical Office

W.8 Annual price change Fuels for private means of transport against the background of the annual change of the entire inflation basket. Source: own study, Central Statistical Office

About the Author

Jaroslaw Jamka - Experienced fund management expert, professionally associated with the capital market for over 25 years. He holds a PhD in economics, a license of an investment advisor and a securities broker. He personally managed equity, bond, mutli-asset and global macro cross-asset funds. For many years, he managed the largest Polish pension fund with assets over PLN 30 billion. As an investment director, he managed the work of many management teams. He gained experience as: Member of the Management Board of ING PTE, Vice-President and President of the Management Board of ING TUnŻ, Vice-President of the Management Board of Money Makers SA, Vice-President of the Management Board of Ipopema TFI, Vice-President of the Management Board of Quercus TFI, Member of the Management Board of Skarbiec TFI, as well as Member of Supervisory Boards of ING PTE and AXA PTE. For 12 years he has specialized in managing global macro cross-asset classes.

Disclaimer

This document is only informative material for use by the recipient. It should not be understood as an advisory material or as a basis for making investment decisions. Nor should it be understood as an investment recommendation. All opinions and forecasts presented in this study are only the expression of the author's opinion on the date of publication and are subject to change without notice. The author is not responsible for any investment decisions made on the basis of this study. Historical investment results do not guarantee that similar results will be achieved in the future.