According to the flash estimate, Poland’s CPI inflation accelerated to 4.0% yoy in September from 3.4% in the previous month. On a monthly basis, consumer prices increased by 0.7%.

What drove the acceleration in CPI inflation in September?

Source: Statistics Poland, Pekao Research

No surprises here – fuel prices were once again the main driver, rising by almost 10% compared with the previous month. Since February, when the conflict in the Persian Gulf and the fuel crisis began, pump prices have increased by more than 35%, adding almost 2pp to headline CPI inflation. Nevertheless, inflation excluding fuel prices remains broadly stable, suggesting that the energy shock has not yet generated broad-based pressure on the prices of other goods and services. However, the increasingly prolonged period of elevated energy and fuel prices raises the risk of a broader spillover of price pressures across the economy, especially as market prices of other energy sources, such as gas and electricity, are also rising at the current stage of the crisis.

CPI inflation excluding fuel prices (% yoy)

Source: Statistics Poland, Pekao Research

Energy prices also increased in September, rising by 0.9% mom – most likely driven by higher prices of bottled gas, wood pellets and coal. We expect the impact of higher energy costs to also become visible in higher household energy tariffs set by the Energy Regulatory Office (URE) from the beginning of next year. The retail price of both electricity and gas could increase by as much as 10%.

In our commentary on August inflation, we argued that food prices were reaching the end of their disinflationary impact in year-on-year terms and would gradually move out of their trough, eventually becoming a strong driver of inflation in 2027. This would be supported by a low base, the blockade of the Black Sea, higher fertiliser prices and a reversal in the trend in pork and poultry prices. The September data confirmed that this process is beginning. Food prices started to rebound, increasing by 0.1% mom in September. They are still lower than a year ago, but the trend is clearly turning.

Core inflation surprised slightly to the downside this time, falling in September to about 3.2% yoy. This was likely driven by one-off movements in more volatile categories, while the underlying trend remains upward.

The conflict in the Persian Gulf is dragging on, as are elevated oil prices. As a result, we continue to treat the scenario we presented in May as our baseline. Fuel and transport prices have risen sharply, while prices of other energy sources and food are also beginning to increase. Inflation should accelerate further in the coming months, heading towards 4.5% yoy by year-end. On an annual average basis, inflation is expected to be at 3.3% in 2026.

Next year, inflation will be driven primarily by supply-side factors – food and energy prices – while domestic price pressures should weaken. Average yearly inflation will be higher, with its path shaped by varying base effects. According to our current forecasts, CPI inflation will remain above the upper range of the NBP’s allowable deviation band around its inflation target for the next year. This is long enough for the Monetary Policy Council (MPC) to consider the increase in inflation persistent.

We do not expect inflation to return to safer territory around the target before Q3 2027. Of course, the entire scenario could be overturned by an end to the conflict in the Persian Gulf and a subsequent decline in fuel and other energy commodity prices. However, it is difficult to treat such an outcome as our baseline scenario at present.

Inflation outlook (% yoy)

Source: Statistics Poland, NBP, Pekao Research