Further Monetary Easing Will Ward Off Deflation

Following a spike to 4.0% y-o-y in April, Polish inflation has since eased to 3.6%, suggesting a resumption of the disinflationary trend, which we expect to play out further through the year. Moreover, while we expect inflationary pressures to ease further, we believe that a combination of lower household indebtedness (relative to some of the more overleveraged economies in emerging Europe) and continued monetary easing, will prevent an outright collapse of domestic prices into deflation.

To read the full article, please choose one of the following options: