Poland: Inflation expectations stabilize, but risks persist: WPI report for November 2024

Inflation Expectations Stabilize, But Risks Persist: WPI Report for November 2024

The Future Inflation Index (WPI), which forecasts changes in consumer goods and services prices for the coming months, remains unchanged in November 2024 compared to the previous month. The decline in inflation expectations from both consumers and businesses has contributed to this stable outlook. However, rising raw material prices on global markets, increasing government borrowing costs, and the weakening of the złoty against the US dollar could push inflation higher.

Consumer inflation expectations have weakened for the second consecutive month, though they remain high. Currently, 83% of respondents anticipate rising prices, but a shift has occurred, with more people expecting price growth to stabilize or slow rather than accelerate.

Inflation expectations among manufacturing companies have also decreased, mirroring the decline in producer price inflation (PPI). This reduction is driven by weak demand, both domestically and internationally, leading to increased price competition. However, industries differ in their pricing outlooks. Food producers continue to show the strongest inclination to raise prices, reflecting their dominant share of nearly 28% in the consumer price index (CPI). Other sectors, such as clothing and household goods, also report a high tendency to increase prices.

The IMF’s commodity price index saw a notable increase in October, primarily due to higher prices for non-ferrous metals, while food raw materials remained stable and oil prices slightly decreased. The rise in metal prices impacts producer prices first, with its effects on consumer inflation typically delayed.