What drives inflation?: an expert
23:26
Inflation in Poland was driven mainly by the increase in production costs – which is influenced by factors such as raw materials, energy, or labor costs. However, the long period of lockdown changed not only social life but also significantly influenced the economic situation around the world. In Poland, we were looking forward to the possibility of going out, eating in a restaurant, and using other various services for a long time. Sudden, increased consumption has become one of the main drivers of inflation growth, which may persist for a long time. Economists explain that so far the increase in prices has been mainly due to the increase in production costs – however, since the unfreezing of the economy, the increase in demand was mentioned as one of the main factors behind the increased level of inflation.
“So far, we have not talked about raising prices in the context of excessive demand. However, for several months, since we started opening services, the demand for them has increased. In addition, the demand for industrial goods, especially those of a permanent nature, has increased. These factors also boosted inflation. The price prognosis in Poland is not optimistic, because, after the period of fueling inflation with costs, it is time for inflation to increase due to increased demand. It is worrying that there was the first impulse in the form of a decrease in the level of people's deposits in banks in May. Of course, this does not only apply to deposits, because in this case the shifts between current accounts and deposits have always been quite large and often commented on. However, at this point, the level of the sum of contributions fell by PLN 6 billion. This situation is completely different, new. A large part of this money sped up retail sales. We have to get used to the fact that inflation may be accompanied by its elevated level for some time to come - and this poses some serious dangers,” Piotr Soroczyński, chief economist of the Polish Chamber of Commerce (KIG), said.
