Polish CPI likely to reach a trough

The Central Statistical Office will publish its CPI figures for Feb, and also therevised data for January, based on the new CPI basket. 

The lower weighting of the food component in the CPI basket creates the possibility that deflation will bottom out in February. 

Societe Generale notes on Friday as follows:

• We estimate that inflation in February will stay at -1.3% yoy. In monthly terms, prices are likely to have increased by 0.1%, mainly due to a rise in food prices. 
  
  
• We estimate food price growth at 0.3% mom. We observed a decrease in fuel prices of only -0.1% mom in February, while the monthly change in transport prices is likely to be neutral for the CPI reading. However, fuel prices, at -17.2% yoy, will likely subtract around -0.9pp from the yearly CPI figure. 
  
  
• We also expect a further decline in clothing and footwear prices (-2.1% mom) and in the communication component (-0.6% mom). 
  
  
• We expect the CPI to gradually increase from March.