Cee cca week ahead polish inflation data and central bank decisions

Key arguments

• Poland's flash August CPI surprised to the upside at 3.4% YoY on strong fuel prices; the final reading rarely deviates by more than 0.1pp and core inflation is expected at 3.2% YoY.
• Poland's July current account deficit is seen at around €1.9bn, lifting the 12-month rolling deficit to 1.1% of GDP; external imbalance stays small versus a fiscal gap of around 7% of GDP, met mainly from domestic sources.
• Polish industrial production should jump to 8.3% YoY in August from 5.1% YoY in July on a favourable calendar and a low base, with RRF-funded sectors outperforming while textiles and furniture face Chinese competition.
• The Czech National Bank is expected to hold rates; producer price momentum is building from energy and basic material costs, though end-price pass-through remains capped by international competition.
• Armenia's central bank is seen holding at 6.50% with inflation around 4.5% YoY, above its 3±1% target; dram appreciation from renewed remittances limits the case for a hike.
• Uzbekistan's central bank is expected to hold at 14.00% but flag room to cut by year-end, supported by CPI at 6.2% YoY, a high real rate, better fiscal discipline and soum strength after gold exports resumed.

Corresponding source evidence

1. We forecast that the deficit was only slightly narrower than in June, amounting to around €1.9bn, mainly driven by the deficit in trade in goods and the primary income deficit.
2. The flash estimate of August CPI surprised to the upside, indicating price growth of 3.4% YoY, mainly driven by a strong monthly increase in fuel prices.
3. As Statistics Poland typically does not fully capture price developments in the final days of the month when compiling the flash estimate, a slight downward revision to fuel price inflation cannot be ruled out.