WPI down by 0.1pp in August while inflation expectations getting stronger
21:55
Future Inflation Index (WPI), forecasting the direction of changes in consumer goods and services prices several months in advance,e dropped by 0.1 points m/m in August, the Biuro Inwestycji i Cykli Ekonomicznych (BIEC) reported. The indicator has been signaling an increase in inflationary tendencies since August last year. They have intensified in recent months and there is little chance that they will disappear quickly.
"Consumer inflation expectations have remained at an elevated level for several months. In the July survey for the European Commission, 90 percent of representatives of Polish households believed that prices would increase in the near future, of which nearly 1/3 said that they will grow even faster than before. At the same time, inflation expectations expressed by representatives of the management of industrial enterprises have been constantly increasing for over a year. Currently, almost every fourth company intends to increase prices for its products soon. The propensity to raise prices has increased in all industries and regardless of the size of the enterprise,” the report reads.
Rising inflation expectations among entrepreneurs translate into an increase in producer prices (PPI). Their average annual growth in June exceeded 7.2 percent per annum and there are no signs that the growth rate of producer prices will slow down in the near future.
"There are many reasons for this situation. One of them is the increase in commodity prices in global markets. In the last 12 months, the IMF’s price index of raw materials published by over 62 percent. Energy resources and rare non-ferrous metals went up the most, and since last autumn we have also seen an approx. 35 percent increase in food commodity prices,” we also read.
Entrepreneurs bear higher and higher costs of employing employees. The costs related to the maintenance of the machine park are growing as well.
(ISBnews)
