The Central Statistical Office (GUS) published a flash estimate of the inflation rate for August 2024, which amounted to 4.3% year-on-year. This means an increase in inflation compared to July, when it was 4.2%. Although most economists expected the July level to remain the same, the August result surprised not only experts, but also investors and consumers.
New inflation data. It was supposed to be different (Youtube)
Experts point out that one of the main factors influencing the increase in inflation was the July increases in energy prices. Despite a slight drop in fuel and food prices on a monthly basis, the overall inflation rate increased. The Polish Economic Institute (PIE) notes that core inflation, i.e. the indicator excluding energy and food prices, fell slightly to 3.7%, which indicates some stabilization, but still remains at a relatively high level.
Comparison with other EU countries
Inflation in Poland is part of a broader trend observed in other European Union countries. In Germany, core inflation in August was 3.1%, and in Spain 2.8%. Experts from PIE emphasize that wage pressure in Western European countries is starting to weaken, which may contribute to a slowdown in price growth. However, the predicted decline in inflation in the EU will probably be slower than previously assumed.
Prospects for the coming months
According to PIE forecasts, we can expect inflation to stabilize in Poland in the coming months, mainly due to a high increase in service prices, which will keep core inflation at around 4%. Experts from mBank draw attention to the potential for further increases in energy prices, especially in connection with higher prices of fuel coal during the heating season, which may further increase inflation in the following months.
Economists' opinions and prospects for 2025
Mariusz Zielonka, chief economist of the Lewiatan Confederation, analyzing data from the first eight months of 2024, indicates that the average annual inflation will probably not exceed the upper limit of the target set by the National Bank of Poland (NBP), which is 4.3%. At the same time, he draws attention to the forecasts of the Ministry of Finance, which predict an increase in inflation to 5% in 2025, which may be related to the need to justify the planned reduction of the budget deficit.
Moving away from the NBP inflation target
The Association of Individual Investors notes that the August increase in inflation takes Poland further away from the NBP inflation target, which is 2.5% with a possible deviation of 1 percentage point. This situation raises concerns that further increases in inflation may negatively affect the country's economic stability and the financial situation of Poles, especially in the context of upcoming increases in energy and raw material prices.
Source: money.pl
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