Poland notes record-high inflation

“Inflation has hit a record high and the price increase will remain close to this for the rest of the year,” Marcin Klucznik, an analyst from the Polish Economic Institute (PIE) said, commenting on Wednesday’s data published by the Statistics Poland’s (GUS), according to which, the price of consumer goods and services in August 2021 increased by 5.5 pct y/y, and 0.3 pct compared to the previous month.

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In July, the price of consumer goods and services increased by 5 percent y/y and 0.4 percent m/m.

“We expect inflation to remain around 5 pct at least until the end of this year. The price increase is global and is due to changes in world markets after the COVID-19 pandemic. In Germany, HICP (Harmonised Index of Consumer Prices) inflation was 3.4 pct and in the Euro zone - 3.0 pct,” he pointed out.

According to the PIE analyst, inflation in Poland will remain higher than in Western Europe and close to that of the US.

“The rise in prices in Poland affects a much wider range of goods and services than in developed economies - in July, the price of almost half (47 pcy) of the products in the HICP basket increased at a rate of 3.5 pct or more, while the price of 59 pct of products grew at a rate exceeding 2.5 pct… in the case of euro area countries, these percentages are 18 and 32 pct respectively,” he pointed out.

The analyst estimated that the average price increase in 2021 will be close to 4.2-4.3 pct.

“Core inflation is likely to remain at a similar level in Q4. The slowdown will occur early next year due to statistical effects. At the same time, the average price increase in 2022 will still exceed 3 pct,” Mr Klucznik concluded.