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    Poland’s Inflation Returns to Normalcy, But Challenges Loom Ahead

    In Poland, February brings a welcome reprieve as recent data from the Central Statistical Office (GUS) indicates a notable decline in inflation. The latest report reveals a year-on-year inflation rate of 2.8 percent, a significant drop from January’s 3.7 percent, as disclosed by GUS.

    This downturn in inflation is a promising sign, heralding a return to economic stability and aligning Poland’s economy within the targeted inflation range set by the National Bank of Poland. It underscores the prudent fiscal policies implemented to steer the nation’s economic course back on track, a sentiment echoed by economists nationwide.

    However, despite the positive trajectory, economists remain cautiously observant, mindful of the challenges looming on the horizon. The imminent expiration of the zero VAT rate on food by the end of March looms large as a significant concern. With the VAT rate poised to surge to 5 percent, analysts anticipate a potential uptick in inflation rates, threatening to undermine the hard-fought economic gains.

    In addition to the February data, GUS has revisited its inflation figures for January, resulting in a slight downward adjustment. Initially pegged at 3.9 percent, the revised figure now stands at 3.7 percent, underscoring the meticulous approach of GUS in its statistical evaluations.

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