It is already known that inflation in Poland has increased. The latest data for April 2021 shows that inflation jumped from the March rate of 3.2 percent to 4.2 percent. These are not final data yet – but even if this number differs by two tenths when the official reports are published, it will still be a very big jump. Much larger than the market was preparing for. What is behind such high inflation? Certainly an increase in fuel prices. These become more expensive – both month by month and annually. However, such a large jump in inflation in one month could not depend solely on the price of oil. Economists guess that rising prices of services contributed mainly to the rise in inflation. There are also several additional risks for the coming months. These include a very weak zloty, clearly weaker than it should be. The low value of our currency makes all imported supplies more expensive than they should be. This is a problem not only for those who directly import – as an economy, we are an open economy, we boast a high percentage of exports to GDP, but we also have a high percentage of imports to GDP. When imports become more expensive due to the zloty exchange rate, the prices on the Polish market rise.

"We do not know yet what constitutes this spike in inflation. It seems that there will be a lot of hikes related to services there. Service prices are rising because labor costs continue to rise – and a large proportion of service and commercial companies are struggling. the pandemic had to cover the costs of running the business and companies did not achieve sufficiently high turnover. Such a situation requires to increase in the margin, which leads to higher prices,” Piotr Soroczyński, chief economist of the Polish Chamber of Commerce (KIG), said.

In his opinion, this year looks to be worse.

"We see an evident shortening of the growing season, poultry producers are also in trouble. We are threatened with a large thinning of flocks due to disease conditions. It may turn out that we will soon face a large wave of increases in poultry and food prices," Soroczyński warned.

(eNewsroom)