21:52 2 December 2024
Inflation trends: service and diverging prices, Poland and the Euro Zone
Inflation is increasingly viewed as a diminishing concern, though the rising cost of services remains a point of worry, particularly in Poland. In November, Poland's consumer inflation stood at 4.6% (down from October’s 5%), compared to 2.4% in the Eurozone. Markets anticipate interest rate cuts in Poland by Q1 2024, aligning with ongoing reductions in the Eurozone.
Service prices in Poland rose by 6.5% y/y, compared to 4% in the Eurozone, sparking debate among economists. This divergence, explained by the Baumol effect, reflects structural changes and wage-driven pressures. While the Eurozone's service inflation seems tied to post-pandemic normalization, Poland's higher service costs hint at persistent structural shifts rather than entrenched inflation. Early signs of stabilization suggest moderated long-term concerns.
(pb.pl)
