The Central Statistical Office (GUS) has released its latest inflation data for March 2025, revealing a year-over-year increase of 4.9% in the consumer price index (CPI). This figure is slightly better than the average forecast of 5.0% projected by economists, indicating positive news for consumers and policymakers alike.
In comparison to February 2025, prices have risen by just 0.1%. This modest increase reflects a complex landscape of price changes across various categories. Notably, food and non-alcoholic beverages have seen a significant price hike of 6.7% year-over-year, while energy carriers, which include electricity and gas, increased by 13.3%. Conversely, fuel prices have dropped by 4.7% compared to the same period last year, contributing to the overall inflation dynamics.
According to GUS, the inflation data for March 2025 is a continuation of a trend where inflation rates have remained below analysts' expectations. Minister of Finance Andrzej Domański commented on the findings, stating, "Inflation in March was 4.9%. Once again, it is below analysts' expectations of 5.1%. In the coming months, we will likely observe further declines in inflation." This sentiment reflects a growing optimism about the country’s economic trajectory.
Breaking down the monthly changes, food prices rose by 0.3% from February, while energy carriers experienced a slight decrease of 0.1%. Fuel prices also fell, decreasing by 2% month-over-month. These trends suggest that while certain sectors are experiencing price pressures, others are providing relief to consumers.
The inflation data has sparked discussions among economists regarding potential changes in monetary policy. Experts from ING Bank Śląski have noted that the lower-than-expected inflation figures could prompt the Monetary Policy Council (RPP) to consider adjustments to interest rates. They suggest that inflation could approach the target range of 3% in the second half of 2025, which would be beneficial for borrowers.
Rafał Benecki and Adam Antoniak, economists at ING, pointed out that core inflation has also declined to approximately 3.4-3.5% year-over-year, down from 3.6% in February. They believe that the recent improvements in inflation dynamics could lead to discussions about rate cuts at the upcoming RPP meetings. "The inflation picture has improved significantly in recent weeks. The peak inflation for this year occurred at a low level, and we expect a return to the target range by July," they stated.
Similarly, analysts from PKO BP have highlighted that March may mark the peak of inflation for this year. They predict that inflation will continue to decrease in the coming months, potentially returning to the upper limit of the target range set by the National Bank of Poland (NBP). They estimate that inflation for the first quarter of 2025 averaged around 4.9%, which is notably lower than the NBP’s previous projections of 5.4%.
In their commentary, PKO BP economists noted, "We estimate that inflation, excluding food and energy prices, has settled in the range of 3.4-3.5%, also below our expectations and February’s results. This indicates that core inflation has returned to acceptable levels after more than three years." They believe that the lower inflation readings may lead to a proposal for interest rate cuts at the next RPP meeting.
Meanwhile, the Confederation Lewiatan's Mariusz Zielonka commented on the recent inflation data, stating, "We have passed the peak of inflation. For the third consecutive month, inflation is rising at less than 5%. Price increases are stabilizing. This situation is likely to continue throughout the year, suggesting that inflation will be closer to 4% annually rather than 5%." Zielonka also noted the ongoing high prices of electricity, which continue to exert upward pressure on inflation.
As the inflation landscape evolves, economists are keeping a close eye on various factors that could influence future price movements. The anticipated changes in energy tariffs later this year, along with potential adjustments in food prices due to supply issues, will be critical in shaping the inflation outlook.
In summary, the March 2025 inflation data from GUS indicates a slight improvement over expectations, with year-over-year inflation at 4.9% and a minimal monthly increase of 0.1%. The trends observed in food, energy, and fuel prices suggest a mixed economic environment where some sectors are under pressure while others provide relief. As discussions around monetary policy intensify, the possibility of interest rate adjustments looms, reflecting the ongoing balancing act faced by policymakers in navigating the complexities of inflation.
