The Inflation Rates and Price Increase Tendency in Poland

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According to a quick estimate of the Central Statistical Office (GUS), the inflation rate in Poland in July 2021 was 5 %, a level that has not been seen in Poland for over ten years. According to economist Marek Zuber, such a high increase in the prices of goods and services may repeat itself within a few months. As Zuber outlined, the inflation at 5 % and more can be seen several times this year. 

This rise in inflation that can be seen now is mainly due to supply factors – rising costs, for example. But there is also an increased money supply – printing money in Poland. Now post-covid consumption has just begun. In the last several months, Polish have not bought much – there were months when they bought less than in the similar months of the previous year. 

So, if such a situation continues, the 5% inflation in the next several months will be considered low.

On Friday, Prime Minister Mateusz Morawiecki also compared the situation with the one in 2012. He outlined that the inflation hovers above 4 % in 2021, however, wages in the national economy increased by 9.8 %, and in 2012 inflation was 2.8 % and growth salaries in one of the months were recorded 2.7 %. 

One of the actions that the Monetary Policy Council may take in connection with the rapid increase in prices is an increase in interest rates. In Poland, interest rates are currently at their lowest level in history. Last year, the Monetary Policy Council cut interest rates three times: on March 17, April 8, and May 28. On the other hand, the last time the MPC raised interest rates was on May 10, 2012.

The prime minister referred to the analyses of the National Bank of Poland. According to the central path of the NBP forecast, the price increase in 2021 will be 4.2% and 2022 – 3.4 %. The inflation should be in a gradual downward trend, so there shall be better information in a few months.

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