Consumer prices jump 7.7% in Poland, faster than expected

WARSAW, Poland (AP) – Poland said on Tuesday that consumer prices rose 7.7% in the past year, proof that inflation is accelerating even faster than expected in the largest Central European economy of the European Union.

November’s figure is the highest inflation rate in 20 years and marks a bigger jump than economists had predicted. Last month it hit 6.8% per year, according to the statistics bureau.

It comes as the annual inflation rate in the 19 countries that use the euro hit 4.9% in November, the highest since record-keeping began in 1997, the statistical agency said on Tuesday. the European Union.

Eurozone consumer prices are being driven up by a huge surge in energy costs, just as Poland’s increases are being fueled by gasoline prices. They have climbed 36.6% since last year, exacerbated by a weakening of the country’s currency, the zloty. The lower zloty means that imports, including oil, which are priced in US dollars, become more expensive for Polish consumers.

The cost of heating jumped 13.4%, while prices for food and non-alcoholic beverages rose 6.4%.

While rising prices are straining households and businesses around the world, they are hitting Central European countries, particularly Poland and Hungary, particularly hard.

Inflation is one of the effects of measures governments around the world took to avert economic catastrophe when the coronavirus pandemic led to lockdowns last year. Many countries, including Poland, have injected money to keep businesses afloat, while central banks have kept interest rates at historically low levels to stimulate economic activity.

This effort was largely successful. The Polish economy grew 5.3% between July and September and is expected to continue growing at about this rate next year. Unemployment is low.

But as economic life has started to return to pre-pandemic normal, increased demand has strained suppliers’ ability to keep pace. Shortages of raw materials are one of the reasons for the surge in prices.

Polish Prime Minister Mateusz Morawiecki last week blamed rising inflation largely on soaring costs for Russian gas imports. He also criticized the EU’s climate agenda and its efforts to reduce greenhouse gases, as the cost of carbon emissions has recently reached record highs.

He made his comments as he announced temporary tax cuts on gasoline and home energy bills in December, intended to mitigate some of the effects of rising prices.

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