• Consumers’ belt tightening in the CEE continued in 2q23: Weak private consumption remained a drag on economic activity in the CEE region in 2q23. A rebound of real incomes is expected which should boost spending.


  • CPI inflation in July (flash reading) fell to 10.8% y/y from 11.5% y/y in June, stronger than forecasted. Price level decreased m/m (by 0.2%) for the first time since Aug. 2020 (excluding the VAT reduction in Feb. 2022). Food prices were the main source of inflation drop, with some additional disinflationary impact generated by energy and core inflation. Core inflation fell to 10.7% y/y from 11.1% y/y, on our estimate. The focus now shifts to the CPI reading for August, as the fundamental question is: when does inflation turn single-digit, opening space for the first interest rate cut. Our current estimate shows CPI inflation in August at 10%. Food prices may push it below this level, while fuel prices generate the key upward risk. As a result, our base scenario still assumes the first interest rate cut in October. However, regardless of breaking the 10% level, we see a clear weakening of the momentum of core inflation, which reduces concerns about inflation persistence, improves the 2024 inflation outlook and increases probability of NBP interest rate cuts.
  • Manufacturing PMI in July declined to 43.5 (cons: 44.5) from 45.1 in June. According to the PMI survey, July was the 15th consecutive month of production decline, and it brought the deepest drop in export orders since the pandemic May 2020. Along with weaker foreign demand, the level of inventories and the demand for labour (employment sub-index) decreased. The drop of input prices recorded in July was the deepest in the history of the survey. Prices of finished products also fell at a record pace, as more than 27% of respondents lowered their charges last month. Hopes of a recovery in demand and new orders supported optimism in the year-ahead outlook for production, but the confidence was weaker than the series-average.
  • Harmonised unemployment rate in Poland stabilised at 2.7% in June, and was the second lowest in the EU, right after Malta and jointly with Czechia.


  • Idle week ahead without major domestic events and data releases.


  • 1.2% – PLN depreciation against EUR during a week, the most since 24-30th Sep’22, following the strongest PLN appreciation trend since 2009-2010.
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