Food prices will continue to rise in 2021

Inflation in 2021 will be lower than in 2020. The slower pace will be influenced by the slowdown in food price growth over the past several months, although the sugar tax and the tax on retail sales may upset forecasts. The oversupply of meat and the global rise in grain prices, the dependence of vegetable crops on the weather, and the impact of blockages caused by the pandemic on fruit prices – these are the main drivers of food prices this year.

“We expect inflation to fall to 2.6% percent in 2021 against 3.4 percent in 2020, i.e. prices will continue to rise, but much slower than in the previous year,” Jakub Olipra, an economist at Bank Credit Agricole, said.

“We believe that the dynamics of food and non-alcoholic beverages prices will amount to around 1 percent in 2021. on an annual basis. If we compare it with the dynamics of the prices of food and non-alcoholic beverages in the previous years, when it amounted to almost 5 percent, it can be seen that it will decrease significantly. So although food will become more expensive, the growth will be much slower than in previous years,” he added.

This forecast is consistent with the November inflation projection by the National Bank of Poland. Overall, the prices of goods and services were to increase by 3.4 percent in 2020 and is to be at the level of 2.6 percent in 2021 and not much higher (2.7 percent) in 2022.

(Newseria)