Polish inflation down slightly from 4.7% to 4.4% in June, compared with a consensus of 4.6%. The main factor has been the fall in core inflation from 4.0% to 3.5%, despite maintaining high levels. With the arrival of the Recovery Fund in the autumn and, from January, the lowering of PIT rates for middle-to-low incomes under Poland’s New Deal reform, consumer demand is expected to be at high levels in the coming quarters. Supply is expected to struggle to keep pace with rising demand, as companies face cost pressures due to commodity rises, lack of components (e.g. integrated circuits) and staff shortages. In this scenario, ING expects CPI to reach an average of 4.2% during 2021.