This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Annual inflation reached 3.0% in July, according to Statistics Poland's (GUS) preliminary estimate. The reading was in line with market expectations. At the same time, consumer prices rose faster than in June, when annual inflation stood at 2.5%.
The pickup was driven primarily by the sharp increase in fuel prices. On an annual basis, they climbed 15.8% in July. This reflected the expiration of the Lower Fuel Prices (CPN) program, as well as a renewed escalation of tensions in the Middle East. As a result, Brent crude prices moved back above USD 80 per barrel, briefly approaching USD 100 during July. That, however, is only one side of the equation.
Interactive chart The other side of the equation is the decline in food and non-alcoholic beverage prices. In July, this category recorded annual deflation of 0.4%, compared with 0.2% annual inflation in June, indicating that the fall in food prices gathered pace.
Importantly, the decline is not a seasonal phenomenon. By comparison, during the summer months in previous years, prices in this category often rose sharply. Annual food and non-alcoholic beverage inflation stood at 4.9% in July 2025, 3.2% in July 2024, and as high as 15.6% a year earlier.
What is driving these price declines? The main factor is the sharp drop in the prices of many agricultural commodities. According to Statistics Poland (GUS) data for June (July figures will be released at the end of August), procurement prices for live hogs fell by nearly 28% year over year, while oat prices declined by 23%. Other grains, including rye and barley, were down by 10–15%. Procurement prices for milk also fell sharply, while wheat and poultry prices continued to post negative annual growth.
Among the few categories tracked by GUS that recorded price increases were cattle, with procurement prices up 5% year over year, and potatoes. In the latter case, however, there was a marked divergence between procurement and retail market prices. At local marketplaces, potato prices in June were 25% lower than a year earlier.
Another contributing factor may be the intense competition among retailers, which has persisted for several years. That said, it is likely to be a secondary influence.
It is precisely this period of food price deflation that has helped keep overall inflation across the economy at a moderate pace.
XYZ Perspective
The outlook for inflation in Poland over the coming months remains highly uncertain. On the one hand, it is difficult to assess the prospects for a lasting ceasefire between the United States and Iran and the reopening of the Strait of Hormuz. On the other, food prices are likely to continue easing inflationary pressures, although it is far from clear how long that effect will last.
The result is an environment of elevated uncertainty. Under such conditions, the Monetary Policy Council (RPP) is unlikely to cut interest rates. At the same time, there is little reason—for now—to expect rate hikes this year.