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Poland’s core CPI upswing signals economic crosswinds for furniture & interiors sector

The Polish economy saw an unexpected rise in inflation in June, a development closely watched by businesses across the European furniture, interiors, and home retail industries. According to preliminary data from ING, CPI inflation rose to 4.1% year-on-year, up from 4.0% in May and slightly above forecasts, driven by a sharper-than-expected uptick in core inflation.

© Michal Bednarek | Dreamstime

While food and non-alcoholic beverage inflation slowed to 4.9% YoY (down from 5.5%) and energy inflation held steady at 12.8%, core inflation rose to 3.4%, up from 3.3% in May. ING analysts identified the core component as "the main source of today's inflation surprise."

This trend is of particular significance to furniture and homeware producers, importers, and retailers operating in or sourcing from Poland, a key hub in the European interiors supply chain. Rising inflation pressures can drive up production costs, reduce consumer purchasing power, and delay spending on discretionary categories such as furniture, fittings, and interior décor.

At the same time, Poland's government has confirmed that the electricity price freeze for households will remain in place through 2025, a move that offers some relief to energy-intensive manufacturers. ING also noted "significantly lower-than-expected wage pressure in May" as another sign that broader inflationary pressures are easing.

Despite this, policy signals from the National Bank of Poland (NBP) have turned more cautious. While recent data may allow for some monetary easing, ING noted that:

'Recent opinions from MPC members indicate that the chances of rate cuts in the coming months are low.' With wage growth above 6%, expansionary fiscal policy, and tightening by other central banks in the region, the NBP is expected to keep interest rates on hold for now, an outcome that may temper business optimism in consumer-driven sectors like furniture and interiors.

Looking ahead, ING still forecasts 25 basis point interest rate cuts in September and November, with the main policy rate expected to fall to 4.75% by end-2025, and 4.25% in 2026. For interior brands and manufacturers, this may signal better borrowing conditions and more stable consumer sentiment over the medium term.

More information:
ING
www.think.ing.com

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