Biznes Fakty
Inflation, short-time work and two important documents
This week, the Central Statistical Office is set to unveil inflation figures for April, while the Ministry of Finance will conduct a debt auction. Additionally, the government will finalize macroeconomic projections for 2025-29 and release its initial report on the deficit procedure. The PMI reading for the industrial sector will be published on Friday.
When it comes to macroeconomic data, the pivotal moment will be Wednesday’s preliminary inflation figures for April. A noticeable decrease in the CPI to just over 4% is anticipated, following a steady inflation rate of 4.9% throughout the first quarter. A confirmation of a significant disinflation trend would likely reinforce the Monetary Policy Council’s belief that interest rates may be lowered during its May session, aligning with various statements made by its members after the Council’s shift towards a more dovish stance in early April.
„We project a substantial reduction in the headline inflation by 0.6 percentage points to 4.3 percent year-on-year in April. This disinflation in April will be influenced by: a) favorable base effects in the food category 12 months post the VAT hike; b) declining oil prices, which will lead to stronger and more pronounced deflation in the transport fuel category. (…) Should our prediction of a significant drop in inflation prove correct, the ramifications for monetary policy will likely be dovish,” state the economists from Goldman Sachs in their weekly overview.
Santander economists predict that the base effect alone, associated with the reimplementation of VAT on food last April, suggests a decline in the CPI by 0.4-0.5 percentage points, assuming a moderate month-on-month rise in food prices. Additionally, the impact of lower oil prices on fuel costs accounts for another reduction of about -0.2 percentage points.
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Industry Data
On Friday, S&P Global will announce the PMI index value for the Polish industrial sector, which in February and March remained above the expansion threshold of 50 points. Economists from Santander expect the PMI to stay just above that mark in April, although it will likely fall below the March figure of 50.7 points.
„The Central Statistical Office’s survey indicated a decline in sentiment in April based on companies’ assessments, suggesting that order flow has weakened. Conversely, the Central Statistical Office’s data on March orders were exceptionally strong. The preliminary PMI for German industry saw a slight month-on-month decrease but remained well above the levels recorded at the end of the previous year. Commentary indicated an improvement in the order inflow scale, partly due to the 'race with customs’ (accelerated order placements and excess orders to build up stock before customs duties take effect). It should be anticipated that the recent improvement in sentiment indicators may vanish as unexpectedly as it emerged, both in Poland and Germany,” Santander noted in their report.
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Government Plans
On Tuesday, the government will approve two significant documents: „Multi-annual macroeconomic assumptions for 2025-2029” and a report on the execution of the „Medium-term budgetary and structural plan for 2025-2028,” stemming from Poland being placed under the excessive deficit procedure (EDP) by the European Commission. The second document may clarify the unexpectedly high forecast for the general government deficit in 2025, set at 6.3% of GDP, which Poland reported to the EC in April. According to the initial estimates sent to the EC by the government in autumn 2024, this year’s sector deficit was projected to be 5.5%.
The Ministry of Finance will conduct its second bond auction in April on Monday. The ministry plans to offer bonds worth PLN 6-10 billion in the OK0127, WZ0330, PS0730, DS0432, DS1034, and WS0447 series for sale. The previous SPW auction was exceptionally successful, with the Ministry of Finance placing PLN 12 billion worth of securities at the main auction, achieving demand of PLN 14.4 billion, the highest since November 2024.
On Monday morning, the Ministry of Family, Labor and Social Policy intends to hold a meeting to summarize the analysis phase regarding shortened working hours and the subsequent steps that can be taken towards implementing shortened working hours in Poland.
On the Warsaw Stock Exchange, besides monitoring the ongoing customs disputes, investors will focus on the performance of large corporations. Quarterly results will be disclosed by banks – Santander, Pekao, and mBank, as well as CCC, XTB, and Kruk.
