July current account data will be released on Monday. We forecast that the deficit was only slightly narrower than in June, amounting to around €1.9bn, mainly driven by the deficit in trade in goods and the primary income deficit. Nevertheless, the deficit was probably wider than in July 2025, meaning that the 12-month rolling deficit increased to 1.1% of GDP from 1.0% of GDP in June. The external imbalance remains very small relative to the scale of the fiscal imbalance (around 7% of GDP), suggesting that fiscal financing needs are being met primarily from domestic sources.
The flash estimate of August CPI surprised to the upside, indicating price growth of 3.4% YoY, mainly driven by a strong monthly increase in fuel prices. As Statistics Poland typically does not fully capture price developments in the final days of the month when compiling the flash estimate, a slight downward revision to fuel price inflation cannot be ruled out. However, the final reading rarely differs materially from the flash estimate, usually by no more than 0.1pp. The detailed data release on Tuesday should allow for a more accurate estimate of core inflation, which we currently expect at 3.2% YoY, up from 3.1% YoY in July.
Industrial production is recovering gradually, and the August reading on Friday is expected to be quite strong (8.3% YoY, up from 5.1% YoY in July), supported by a more favourable calendar effect, with one additional working day, and a low base from August last year. Output growth remains diversified across industrial sectors. Some industries are benefiting from the ongoing implementation of RRF-funded projects, such as other transport equipment, while others continue to struggle with competitive pressure from China, including the textiles and furniture sectors.