Inflation and rising prices in Poland. Is everything so bad?
In July this year, the Polish economy recorded the highest inflation rate in 10 years - about 5%. However, the trend remains negative. Leading economists say Poles should prepare for the same situation in a few months. This is a typical phenomenon for the economy, when inflation reaches record levels several times a year.
This situation can be triggered by several factors simultaneously. For example, in Poland there was an increase in supply factors (increase in costs). There has also been an increase in the supply of money, as more money has been printed in recent months. Post-covid recovery in Poland is just beginning. Over the past few months, the country has purchased fewer goods than in the same period last year.
That is why, if the trend remains unchanged, the inflation rate may rise even more.
Recently, the Prime Minister of Poland compared this situation with a similar one that took place in the Polish economy about 9 years ago. Even though inflation has risen, Poles can see almost 10% growth in wages, while in 2012 wages grew very slowly, and the growth rate was approximately equal to the inflation rate.
One of the most effective ways to fight inflation is to raise interest rates. In all history, Poland has not seen such a low level of interest rates as it is now. In the last year alone, the Polish government has cut interest rates three times. At the same time, their last increase took place 9 years ago.
This information was based on the analysis of the National Bank of Poland. According to this report, price increases will decrease every year, and the same trend applies to inflation.