CPI inflation in January jumped to 2.7% y/y, in line with our forecast (the highest on the market) and way above market consensus (2.4% y/y). Our detailed comment is available here. PPI inflation in January headed north (0.7% y/y) with more to come in coming months amid a mixture of weaker PLN, rising commodity prices and low base effects.

Current account surplus in December was below our estimates, but still at an impressive 3.5% of GDP (in 2020 as a whole), leaving domestic economic policy space for action without risk of side-effects.

Declining employment (by -2.0% y/y in FTE terms), moderate wage growth (+4.6% y/y) and rising CPI inflation (to 2.7%) depressed the real wage bill growth in January to 0.0% y/y.

The week ahead:

Detailed GDP data for 4q20 (consumption PKOe: -3.1% y/y, investments PKOe: -10.8% y/y) are pure history now. Our weekly economic activity tracker hovers around the neutral level suggesting (so far) a mild GDP decline in 1q21.

According to a tentative MinLab estimate the registered unemployment rate in January rose to 6.5% (from 6.2% in Dec.), in line with seasonal pattern.

Monetary statistics for January will be an indication of lending activity.

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