Food and services push Polish inflation

Vegetable prices up 23 percent on last year and rubbish-collection prices have risen 23 percent according to Statistics Poland September figures.

Price rises lower than expected in September

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Poles investing in bonds to avoid inflation as price rises for September confirmed at 2.6 percent in the final inflation figures announced by Statistics Poland.

While food prices have not risen by quite as much as in previous months – only 6.2 percent y/y overall, some other food basket items such as pork and sugar have grown by more than ten percent, according to the final inflation prices released on Tuesday, which confirmed the initial estimate released at the beginning of October.

Services costs have risen significantly as such as restaurant bills are up 5.2 percent on last year, and private medical treatment costs have risen by 6.2 percent but the picture is not completely clear, as telecommunication charges went up by 0.6 percent.

A rate of 2.6 percent is above the National Bank of Poland’s inflation target of 2.5 percent, but within a band which is deemed as acceptable and so not likely to trigger a rise in the reference interest rates, which now stand at a record-low 1.5 percent.

With inflation gathering pace, bankier.pl has noted that an increasing number of Poles have bought inflation-proofed four-year government bonds in recent months in order to get a better return on their savings, especially as banks have been cutting the rates they are offering on savings accounts.

These instruments, as well as ten-year bonds, are becoming more popular, with many families choosing to buy bonds with money received as part of the 500+ child benefit scheme.

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