March’s final consumer inflation reading came in at 3.0% year-on-year, in line with earlier estimates. On a monthly basis, prices rose by 1.1%, slightly above forecasts of 1.0%. The main factor pushing inflation higher was a sharp increase in transport prices, which rose by 8.2% month-on-month. This was directly linked to tensions in the Middle East and the resulting spike in energy commodity prices, including oil and gas.
Despite this temporary increase, inflation remains within the National Bank of Poland’s acceptable deviation band around its target of 2.5%, with a tolerance range of plus or minus 1 percentage point. This limits the pressure for an immediate monetary policy response.
Statements by NBP Governor Adam Glapiński and members of the Monetary Policy Council suggest that the central bank will continue to follow a “wait and see” approach. Under current conditions of heightened uncertainty and an external supply shock, the key issue is to assess the scale and durability of the conflict, as well as its impact on the broader economy. In practice, this means that interest rate decisions in the near term will depend heavily both on incoming macroeconomic data and on whether inflationary pressure begins to spread more broadly.
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