CPI inflation and core inflation (% yoy)

Source: Statistics Poland, Macrobond, Pekao Analizy

What were the sources of the surprise? Primarily non-core categories, especially food and non-alcoholic beverages, whose prices rose by 2.4% yoy. We had expected a materially slower increase (1.7% yoy). In January alone, the prices of food and non-alcoholic beverages increased by 1.1% mom, similar to the previous year and closer to the seasonal pattern of the last decade than we had assumed. The reason for the surprise may have been a greater than expected increase in the cost of heating greenhouses in January. Moreover, there was also a bigger jump in residential energy prices (3.4% yoy instead of 2.5% yoy). Together, these two categories account for 0.3 percentage points of the surprise. In our opinion, core inflation fell to 2.5% yoy, lower than in November and December 2025, when it was 2.7% yoy.

Prices of food and non-alcoholic beverages in January (% mom)

Source: Statistics Poland

What next? Core inflation is becoming less and less of a problem (as today’s data seems to confirm), but services inflation will remain significantly higher than goods inflation due to the “stickiness” of high labour costs. Moreover, the forecasted high GDP growth rate in Poland for 2026 should not generate significant inflationary pressure – the output gap is only just closing, and economic growth is accompanied by a relatively high productivity growth. In 2025, stable prices of industrial and energy raw materials limited inflationary pressure in the goods segment. Not much should change in this regard in 2026, and additionally, the growing share of cheap imports from China will have a disinflationary effect. Also, signals from the food market point to limited price pressure, despite today’s setback.

The disinflation process in Poland has not yet ended, although its pace will clearly slow down in 2026. By mid-year, both CPI inflation and core inflation should continue to fall. We see a potential turning point in the second half of 2026, among others due to the delayed, inflationary impact of expansionary monetary policy. According to our forecasts, CPI inflation will average 1.9% in 2026, clearly below the November NBP projection and market consensus.

From the of the Monetary Policy Council’s (MPC) point of view, the January reading was not bad at all. Firstly, core inflation was exactly where the MPC would like to see it in the medium term: right on target. Secondly, this time the NBP had more accurate forecasts than private sector analysts. In a recent statement, G. Masłowska cited a forecast in which inflation was expected to be around 2%. Taking these arguments into account, the Council’s communication in recent weeks and the uncertainty regarding the effects of changes to the inflation basket in March, a rate cut in March does not seem in danger.

The January inflation reading was also the first in which the new classification of goods and services in the consumer basket was applied – the so-called COICOP 2018, introduced throughout the European Union. According to Eurostat, this reform had a very minimal impact on the HICP, but in Poland, this effect could have been greater, which would explain part of the inflation surprise in January. In its publication, GUS referred to Eurostat’s estimates and did not inform what impact the introduction of the new COICOP classification had on the January reading.