PL: A slight downside surprise in December

Inflation figures for December were slightly lower than anticipated, with the annual rate at 4.8% and the monthly rate at 0.2%. Both rates were 0.2 percentage points below the consensus and 0.1 percentage points below our expectations. The primary driver of this positive surprise was food prices, which increased less than the seasonal pattern suggested.

The final release for 2024 indicates that the average annual inflation for the year was 3.7%. As previously mentioned, food prices were a positive surprise in December, increasing by only 0.2% since November, resulting in an annual inflation rate of 4.8%. We had anticipated a monthly increase of around 0.5%, mainly due to seasonality and elevated prices of certain food items. The other two categories, energy prices and car fuel, showed no surprises. Energy prices remained constant on a monthly basis, maintaining an annual growth rate of 12%. Fuels were 3.9% cheaper than in December 2023, but their price increased by 0.3% since November. Decembers core inflation is expected to be 4.2%, slightly lower than in November. Our inflation outlook for 2025 remains slightly above 4%, with a peak anticipated in March.