Poland is facing double-digit inflation, the president of the Polish Development Fund has said.
The warning comes, as prices of consumer goods and services (Consumer Price Index, CPI) increased by 12.3% YoY and by 2% MoM in April, the Central Statistical Office (GUS) reported in a flash estimate.
Economists polled by PAP Business estimated that April’s CPI would reach 11.5% YoY and 1.3% MoM.
In March, the prices of consumer goods and services increased by 11% YoY and by 3.3% MoM.
Commenting on GUS inflation data, Pawel Borys, president of the Polish Development Fund, said the double-digit inflation could happen in the next few months “with a possible peak in Q3”.
Posting on Twitter, he said: “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. Wages are chasing inflation and inflation is chasing wages.”
A peak in inflation will be seen in August at around 13%, the Polish Economic Institute (PIE), government think-tank, has 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: “The main surprise is food prices, which increased by 4.2% MoM.”
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%,” Piotr Bielinski, an analyst at Santander Bank, said.
“This is undoubtedly a strong argument for a rise in interest rates by 100 basis points at the next MPC meeting,” he added. (The First News/Business World Magazine)