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Core inflation in August 2018

Date: 14-09-2018

NBP data: In August 2018, inflation net of food and energy prices stood at 0.9%. In the analysed period, the CPI index amounted to 2.0% (y/y).

On 14 September 2018, Narodowy Bank Polski posted data on core inflation indices in August 2018. In year-on-year terms, inflation:

  • excluding administered (state-controlled) prices amounted to 2.2%, as against 2.1% the month before;
  • excluding the most volatile prices amounted to 1.3%, as against 1.1% the month before;
  • net of food and energy prices amounted to 0.9%, compared to 0.6% the month before;
  • the so-called 15-percent trimmed mean (excluding the impact of 15% of the price basket characterized by the lowest and the highest growth rates) stood at 1.7%, compared to 1.6% the previous month.

The stabilization of inflation was driven, on the one hand, by growth of the prices of goods (by 0.3 p.p. to 0.2% y/y, on the back of a weaker seasonal fall in the prices of clothes), of services (by 0.3 p.p. to 1.7% y/y, as a result of the increase in the price of motor vehicle insurance by 7.4% m/m), and of energy carriers (tariffs on the sale of natural gas increased by 2.2% m/m). On the other hand, there was a decrease in the annual growth of the prices of fuel for private means of transport (by 2.7 p.p. to 15.3% y/y; negative base effect). In August 2018, annual price growth of food and non-alcoholic beverages also decreased slightly (by 0.1 pp. to 2.1% y/y).

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 index shows the average price movement across the whole broad basket of consumer goods. By calculating the 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 forecasted 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, for example, by short-lived price hikes triggered by incidental factors.

The core inflation measure most frequently used by analysts is inflation net of 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. Food prices are largely dependent, among other things, on the weather and conditions prevailing in the domestic and global agricultural markets.

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 2018-12-14
1 EUR4.3021
1 USD3.8095
1 CHF3.8202
1 GBP4.7940
100 JPY3.3558

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Narodowy Bank Polski
Świętokrzyska 11/21
00-919 Warszawa
Poland

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