Narodowy Bank Polski

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Core inflation in March 2018

Date: 16-04-2018

NBP data: In March 2018 inflation net of food and energy prices amounted to 0.7%. In the analysed period, the CPI index stood at 1.3% (y/y).

On 16 April 2018, Narodowy Bank Polski posted data on March core inflation levels, In year-on-year terms, inflation:

  • excluding administered (state-controlled) prices stood at 1.5%, the same level as the month before;
  • excluding the most volatile prices amounted to 1.0%, as compared with 1.2% in the month before;
  • net of food and energy prices amounted to 0.7%, as compared with 0.8% the month before;
  • the so-called 15% trimmed mean (excluding the impact of 15% of the price basket characterised by the highest and lowest growth rates) was running at 1.2%, as compared with 1.3% the month before.

The decrease in inflation was primarily driven by a lower growth of prices of core inflation components. The growth of service prices declined to 1.9% y/y (as compared to 2.1% y/y in February), which was mainly a result of lower prices of motor vehicle insurance and the month’s steeper-than-usual decrease in tourist fees. The growth of prices of non-food products declined slightly in March 2018, to -0.5% y/y (as compared with -0.4% y/y in February). The steepest price drops in this category were observed in the prices of medical and pharmaceutical products as well as those of furnishings and household equipment. In March 2018, food and energy price growth picked up slightly (to 3.7% y/y and 0.4% y/y, respectively).

Narodowy Bank Polski computes the four core inflation indices on a monthly basis in order to highlight the nature of inflation developments in Poland. The CPI only shows average price movement across the whole broad basket of consumer goods. By calculating core inflation indices we can address price changes in various segments of the basket. Thus, sources of inflation can be identified more precisely, and future trends forecast more accurately. Furthermore, it can be determined to what degree the observed inflation trend is a lasting phenomenon, and to what extent it is driven by, for example, short-lived price hikes triggered by incidental factors.

The core inflation measure most frequently used by analysts is inflation excluding food and energy prices. It captures movements in prices which are fairly responsive to the central bank's monetary policy. On the other hand, energy prices (including fuel prices) are not set domestically, but determined in the global markets, sometimes as a result of speculation. Also food prices are largely dependent on, among other things, the weather and conditions prevailing in the domestic and global agricultural market.

See also: Core inflation data »

NBP interest rates

Reference rate 1.50
Lombard rate 2.50
Deposit rate 0.50
Rediscount rate 1.75

Exchange rates

Table of 2018-11-19
1 EUR4.3242
1 USD3.7840
1 CHF3.7947
1 GBP4.8701
100 JPY3.3586

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00-919 Warszawa
Poland

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