WPI up by 0.9 pts m/m in October because the rate hike was delayed

The Future Inflation Index (WPI), which forecasts the direction of changes in the prices of consumer goods and services several months in advance, increased by 0.9 percentage points m/m in October 2021, the Bureau of Investments and Economic Cycles (BIEC) reported. The October increase in basic interest rates was cosmetic and delayed, so the effects of this decision will not affect inflationary processes in the coming months. The indicator has been growing continuously for 15 months.

As noted, many economies have recently recorded an increase in inflation, which on the one hand is a consequence of the post-pandemic recovery and rapidly growing demand for raw materials, which cannot be met by the supply, and on the other hand, social protection during lockdown periods.

"Poland entered this phase of economic recovery with inflation higher than most EU countries, which was mainly a consequence of the NBP's pro-inflationary policy, which was to guarantee the government higher budget revenues. Low-interest rates were to stimulate consumption, and periodic interventions in the currency market were supposed to lead to growth However, they did not take into account the consequences of rising import prices," the report reads.

As noted, currently almost all components of the WPI are working towards an increase in inflation.

(ISBnews)