Inflation in Poland has been falling faster than expected lately, said Ernest Pytlarczyk, chief economist at Pekao Bank. A similar trend is observed in other EU countries.
In his opinion, this trend may continue, and inflation forecasts will soon be revised downward.
The fall in inflation is underestimated
— Thus, the axiom known to economists (although not always assimilated in forecasts) is confirmed that inflation surprises in the direction of the trend. As it falls, its decline is underestimated and we get a number of surprises,” Ernest Pytlarchik said in a PAP commentary on European inflation data.
He also pointed out that inflation in the four largest EU countries, i.e. Germany, France, Italy and Spain, fell more than previously predicted. In his opinion, we can experience a similar surprise in Poland.
One sign of disinflation could be the fact that, according to the Central Statistical Office (CSO), prices did not rise in May compared to April.
— There was such deflation in the spring and sometimes in the summer, but we are used to the fact that prices do not rise during these periods. Meanwhile, these seasonal downturns are perfectly normal, said Bank Pekao’s chief economist.
Low inflation doesn’t mean prices are falling
Recall that from the so-called According to the rapid measurement of inflation, in May it amounted to 13 percent. In April, it was 14.7 percent. However, this does not mean that prices are falling - they are just rising more slowly.
- The positive news is that for a very long time, for the first time, from month to month, i.e. in May compared to April this year, the prices did not change. I’m talking about this full basket of prices. Of course, this is preliminary reading. On the other hand, slightly less optimistic information is that food prices continue to rise from month to month. They grew in May by almost 19 percent compared to May of last year, and by 0.6 percent in May compared to April of this year - said Dr. Małgorzata Starczewska-Krzysztoszek from the Faculty of Economics of the University of Warsaw on RMF FM.
Inflation ate growth
Inflation, even falling, hits our wallets because, although many Poles have received a raise in recent months, in real terms this money is still worth less than before inflation.
- Even if our wages have increased by 10 or 12 percent, let’s say that this is the average for the sector of enterprises with 10 or more employees, it is within 12 percent. we have a pay rise. But this, firstly, is very unevenly distributed among individual sectors of the economy, and secondly, it does not apply to microenterprises, does not apply to the entire public sector. There is an increase, if there is, then definitely less. And in the public sector? Let’s look at teachers, there is almost no increase, and inflation affects all of us, all households, the expert said.
Source: Wprost
I am George Brown, author at Daily News Hack. I mostly cover economy news and I have been doing this for quite some time now. I have a lot of experience in this field and I’m always looking for new opportunities to learn more.
