National Bank of Poland : Inflation expectations of private individuals

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Inflation expectations of private individuals

Date: 31-12-2013

NBP data: Consumers surveyed by NBP in mid-December expect prices will increase slower over the next 12 months than so far.

The NBP release on inflation expectations of private individuals, published on 31 December 2013, shows that since April 2013, inflation expectations have remained at a low level, i.e. below the lower limit for deviations from the NBP inflation target.

The survey, conducted in mid-December puts the average index of consumer inflation over the next 12 months at 0.7%. The figure was similar in the previous month while in October, the figure was 0.9%. In the quantification procedure of inflation expectations it was assumed that at the time of the survey participants were aware of the current inflation index of 0.8%

December brought a slight change in the structure of the answers to survey questions. The percentage of the respondents expecting prices to rise faster over the next 12 months than so far had fallen - 13.0% of the respondents were of this opinion, while a month before the figure stood at 14.1%. More than half of the respondents, i.e. 52.7% (51.0% a month ago) said that prices would continue to rise at the previous rate, whereas 19.4% - that price growth would slow down (in November, 18.2% of the respondents represented this opinion). Out of those questioned, 4.6% do not expect any price changes (6.7% a month ago), while 0.3% believe the prices will decrease (in the previous survey, 0.1%).

Narodowy Bank Polski examines, on a regular basis, inflation expectations of individuals - as well as entrepreneurs, financial analysts and professional forecasters. These constitute one of the inputs to the monetary policy decision-making process.