Polish inflation rebounded to 3% in July from 2.5% in June after fuel prices surged 13.9% month-on-month once the CPN programme ended. The surprise jump has cooled rate-cut bets: most analysts polled by Parkiet now expect no move this year.
The flash GUS estimate showed CPI up 0.8% month-on-month; the full breakdown arrives on 13 August. Fuels soared 13.9% m/m and 15.8% y/y after 23% VAT returned and Strait of Hormuz tensions pushed oil up. The fuel surge added about 0.6 percentage point to CPI, accounting for nearly all of the acceleration. ING calculates that without fuels inflation would have been around 2.2%.
Food and soft drinks fell 0.8% m/m and were 0.4% below last year’s level, while energy carriers rose just 0.1% m/m. Pekao sees core inflation at roughly 3.1%, so the jump is station-driven rather than broad-based. Since fuels are now far above their pre-CPN level, the annual indicator will feel the effect for a year; with dearer diesel feeding into transport and farming, Pekao expects CPI to stay mostly between 3% and 3.5% until the end of the year.
The NBP governor had floated a 25-basis-point cut after the summer, but ING now assumes stable rates and PKO BP pushes the next possible move to mid-2027. Poland’s 3% reading is close to the euro-area average, where HICP rose to 2.9% from 2.8% for the same fuel-related reasons. Lithuania has the highest euro-area inflation at 5.6%, Estonia the lowest at 2%; Germany is at 2.8%, France 2.4%, Italy 2.9%, Spain 3.8%.
Drought tests nuclear and hydro plants
In Hungary, Paks is being fully shut down for the first time in 44 years; it normally supplies over 40% of the country’s power, so Budapest is preparing curbs for large industrial users and has asked for savings, while imports are needed to cover the gap. Romania has switched off one Cernavodă reactor and put the grid on heightened alert, while Serbia’s Danube hydropower plants Đerdap I and II are running at about 20% and 30% of capacity.
France faces a different constraint: EDF has lowered output at some reactors because warm rivers cannot safely absorb heat discharges, and low water has cut hydro generation just as air conditioning demand climbs. New nuclear projects will need to account for hydrology 30-50 years ahead, including site choice, cooling technology and alternative water sources.
Circle K moves closer to buying Żabka
Alimentation Couche-Tard, owner of Circle K, signed a formal transaction agreement for Żabka in a deal worth 32.62 billion zlotys, or about 8.7 billion dollars, the largest acquisition in the Canadian group’s history. Main Żabka shareholders representing about 57% of capital have irrevocably agreed to sell; a tender offer at 32 zlotys per share is due in August, with closing planned by year-end. If Couche-Tard reaches 95%, it can squeeze out minorities and delist the company.
Żabka closed Friday at 31.8 zlotys after jumping 8.7%, close to the offer price. Trigon valued the stock at 34 zlotys and mBank at around 33, so the premium is modest. Couche-Tard sees about 250 million dollars in synergies and wants to keep the brand, business model, headquarters and management, using Żabka’s 12,000 stores, logistics, app and franchise format as a separate quick-commerce concept for other markets.
Digital tax starts government review
The digital tax draft has entered inter-ministerial consultations, the first formal step before it reaches the cabinet, parliament and president. The 3% levy would cover online advertising, digital platform intermediation and sale of user data, applying to groups with at least 1 billion euros in global revenue and 25 million zlotys in Polish revenue from covered services; some media, communication and streaming services would be exempt.
It could come into force in 2027 and raise around 2.5 billion zlotys in the first year and 3 billion in the next. Liabilities can be cut by Polish CIT, part of investment spending and R&D outlays, even to zero.
– This is an incentive to invest, not an additional cost of doing business – said Deputy Minister of Digital Affairs Dariusz Standerski.
Washington strongly opposes digital taxes because they mainly hit big American tech firms, and President Nawrocki’s close relationship with the US makes the final legislative outcome uncertain.
Warsaw bourse ends July with records
WIG20 gained 9.3% in July, the best month since January 2025, and closed at 3920.26 points, an all-time closing high. In Friday’s session it reached 3928.98, only 11.5 points, or less than 0.3%, below the intraday record of 3940.5 set in October 2007. WIG finished at 147,400.90, its 32nd record this year, including nine in the last sixteen sessions.
Friday’s movers included Żabka (+9%), Orlen (+1.1%), Erste Bank Polska (+2%), PGE (+3.8%) and Tauron (+1.5%), while PKO BP lost 1.3%. Turnover exceeded 3.6 billion zlotys. Polish GDP growth, strong bank earnings, better global sentiment and inflows to cheaper European markets have made WIG one of the strongest large indices worldwide and a top-five performer over the past month.
Source: WNP.PL, Photo: PAP/Leszek Szymański
