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    Poland's CPI hits 12.3 pct y/y in April, but the inflation peak possible in the third quarter

    Prices of consumer goods and services (Consumer Price Index, CPI) increased by 12.3 per cent year on year and by 2.0 per cent month on month in April 2022, the Central Statistical Office (GUS) reported in a flash estimate on Friday.

    Economists polled by PAP (Polish Press Agency) Business estimated that April’s CPI would reach 11.5 per cent year on year and by 1.3 per cent month on month.

     

    In March, the prices of consumer goods and services increased by 11 per cent year on year and by 3.3 per cent month on month.

     

    Pawel Borys, President of the Polish Development Fund, in a commentary on Friday’s GUS inflation data predicted double-digit inflation in the next few months “with a possible peak in Q3.”

     

    “Unfortunately, high prices of food, fuels, gas, metals and shortages of raw materials, as well as strong wage dynamics will cause double-digit inflation in the next few months with a possible peak in the third quarter,” Borys wrote on Twitter.

     

    “Wages are chasing inflation and inflation is chasing wages,” he wrote.

     

    On Friday, the Central Statistical Office (GUS) reported that prices of consumer goods and services in April 2022 rose 12.3 per cent year on year and 2.0 per cent month on month.

     

    A peak in inflation will be seen in August at around 13 per cent, the Polish Economic Institute (PIE), a government think-tank, said. According to PIE analysts, inflation will come down in the longer term due to a weakening economic situation in the eurozone.

     

    Urszula Krynska, an analyst at PKO BP, commented that “The main surprise is food prices, which increased 4.2 per cent month on month.” She said that “inflation was additionally boosted by energy and fuel hikes, which are growing strongly year on year but slowed on a monthly basis.”

     

    “We have seen another big surprise with inflation. This is mainly due to food and energy prices, but it seems that core inflation has also increased – our estimate at the moment is 7.3 per cent,” Piotr Bielinski, an analyst at Santander Bank, said.

     

    “This is undoubtedly a strong argument for a rise in interest rates by 100 bps at the next MPC meeting,” he added.

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