Norges Bank Decision: Holding Rates Amidst Shifting Global Outlook

We think that the Polish statistical office is unlikely to markedly change its flash estimate of November CPI. As we expected, November brought a substantial increase in fuel prices when compared to October, while food prices also increased in monthly terms.

 

The decline in household energy prices turned out to be smaller than our forecast and core inflation moderated more than we had projected. The details of November's CPI reading should allow us to scrutinise the factors behind this lower core inflation print and potentially make some adjustments in the projected path of core inflation, depending on whether November's surprise was down to one-off drivers or was broad-based.

Current account (Oct): €2200mn

We forecast a large surplus on the current account balance in October on the back of a substantial improvement of the primary balance (a much smaller deficit than in the previous months) amid continued surpluses on both goods and services trade. According to our forecasts, exports fell by 3.2% YoY, while imports declined 11.1% YoY. The 12-month cumulative current account surplus improved to 0.8% of GDP vs. 0.6% of GDP after September.