Seasonal adjustment of the consumer price index in Poland

Seasonally adjusted inflation indexes are available in official statistics and commonly used for analyzing demand pressure in many developed countries. This paper studies the seasonality of consumer prices in Poland. To address this issue we apply analyses in a time as well as in a frequency domain. The paper offers tentative calculations of the magnitude of monthly consumer price index variations corresponding with seasonal frequencies. Furthermore, we present the seasonal adjustment procedures applied worldwide and estimate monthly inflation indexes refined from seasonality for Poland. The main conclusion of this paper is that seasonal factors account for about 40% of monthly inflation volatility, which is, first and foremost, a consequence of specific food price changes over a year. Unprocessed food price dynamics variation is generated in 80% by seasonality and is ten times higher than CPI variation. Therefore, seasonally adjusted monthly inflation indexes in January, March, April, September and October are lower than not corrected series. Moreover, the greatest impact of seasonal factors is observed in June, July and August, when reductions in food prices are heightened by clothing sales, and seasonally adjusted indexes are significantly higher than raw indexes.