We learned new data on the scale of price increases. Inflation in Poland is falling, but it is too early to be happy about it. We’ll explain why in a moment. The Central Statistical Office also published the changes that took place in the so-called the inflation basket.
Inflation in Poland is falling
Prices of consumer goods and services in February 2021 increased by 2.4% compared to the same month last year. This means that inflation in Poland has dropped below the central bank’s inflation target.
As reported by NBP website:
Since 1999, the NBP has been using the direct inflation targeting strategy. Since the beginning of 2004, the continuous inflation target has been at 2.5%. adjustable up to 1 percentage point up or down. This means that the annual CPI should be as close as possible to 2.5% each month.
What rose the most? Compared to February 2020, we will pay 0.6% more for food and non-alcoholic beverages, alcoholic beverages and tobacco products increased by 2.1%, apartment use by 6.1%, while household equipment by 2 2 percent
Prices in sectors such as health (4.5%), communications (5.1%), recreation and culture (4.1%), education (5.5%), restaurants and hotels (4.9%) and other goods and services (2.4%). We will pay less for clothing and footwear (-2.9%) and transport (-1.6%).
Compared to the same month of the previous year, higher housing prices (by 5.2%) increased this indicator by 1.29 percentage points. Lower prices in terms of transport (by 1.6%) and clothing and footwear (by 2.9%) decreased the index by 0.15 percentage points, respectively. and 0.12 percentage points
– explains the Central Statistical Office.
It is worth noting that the value of 2.4 percent. on average inflation. Prices in individual groups of goods and services grow much more. On the other hand, inflation is lowered by transport fees (due to the current pandemic situation, we travel much less often) and the prices of clothes. Moreover, lower inflation does not mean that prices are not rising. Most services and products continue to rise, but at a slower pace.
Changes in the inflation basket
As every year in March, the CSO also changed its inflation basket. The changes are made on the basis of the household budget survey.
Now, the share of food, including alcoholic beverages and tobacco, home use and communications has increased significantly. The shares of the categories which were made difficult to use due to lockdowns decreased.
All of this means that high inflation may come back to us at the end of the pandemic.
January inflation: 2.6%
February inflation: 2.4%
So again below the NBP target (as in December). It does not matter, however, as inflation will start to rise very quickly in the coming months.
– mBank Research (@mbank_research) March 15, 2021