Polish Inflation Hits 3% on Fuel Price Surge

Poland's inflation rate rose to 3% in July, exceeding the National Bank of Poland's target but still within acceptable limits. The increase was primarily driven by a surge in fuel prices due to the end of government support measures and higher VAT rates.

The main contributor to the rise was a 13.9% month-on-month increase in fuel prices, with higher standard VAT rates on motor fuels adding around 0.5-0.6 percentage points to annual inflation compared with June.

Core inflation excluding food and energy edged up to 3.1% YoY in July from 3.0% YoY in June, reflecting the impact of geopolitical developments and volatile global oil prices on domestic fuel prices.