Core inflation in March 2023

NBP data: In March 2023, inflation net of food and energy prices amounted to 12.3% (y/y). In the period under analysis, the Consumer Price Index (CPI) stood at 16.1% (y/y).

On 17 April 2023, Narodowy Bank Polski published data on core inflation indices in March 2023. In year-on-year terms, inflation:

  • excluding administered (state-controlled) prices stood at 15.7%, compared to 18.1% a month earlier;
  • net of the most volatile prices, amounted to 16.0%, compared to 15.5% a month earlier;
  • net of food and energy prices, amounted to 12.3%, compared to 12.0% a month earlier;
  • the so-called 15% trimmed mean (excluding the impact of 15% of the price basket characterised by the highest and lowest growth rates) was running at 15.5%, compared to 17.0% a month earlier.

Narodowy Bank Polski computes the four core inflation indices on a monthly basis to highlight the nature of inflation developments in Poland. The CPI shows average price movements across the whole broad basket of consumer goods. When calculating core inflation indices, price changes in various segments of the basket are analysed. Thus, sources of inflation can be identified more precisely and future trends forecast more accurately. This also helps to find to what degree inflation is permanent and to what extent it is determined, for example, by price changes of a short duration triggered by incidental factors.

The core inflation measure most frequently used by analysts in inflation targeting is inflation net of food and energy prices. It captures trends in the prices of those goods and services which are fairly responsive to the central bank’s monetary policy. On the other hand, energy prices (including fuel prices) are not set domestically but determined in the global markets, sometimes as a result of speculation. Food prices are largely dependent on, among other things, the weather and conditions prevailing in the domestic and global agricultural market.