The Central Statistical Office will release the inflation in Poland in June reading on July 1 (today). In May, inflation was 13.9% and even then it was the highest rate in over 20 years. This time we can break another record. Experts leave no illusions – inflation will exceed 15 percent. and will continue to grow, and food prices may jump up to 20%.
Experts were asked to specialise in economic and financial analysis about the inflation forecasts in June 2022. They agree that the June reading will exceed 15%, even before the Central Statistical Office released the official data. Such a strong increase in relation to May is the result of, among others, unflagging pressure on the increase in fuel prices, which in June was approx. 10 percent. higher than May.
Inflation in Poland in June may be as high as 15.5%
– According to our forecasts, CPI inflation (consumer price index – editorial note) will increase to 15.5 percent in June. yy. Such a result will result not only from a strong increase in fuel prices (almost 10% m / m) and slightly weaker than in recent months, but still a significant increase in food prices (0.8% m / m), but also a large inertia in other categories of goods and services, which will result in core inflation rising to at least 9%. yy. – Piotr Bielski, director of the Economic Analysis Department at Santander Bank
Mariusz Zielonka, an economic expert of the Lewiatan Confederation , is of a similar opinion , who claims that inflation will reach 15.3 percent. “Such a strong increase in relation to May will be dictated by the unflagging increase in oil prices in the world and the costs of generating energy. In the case of Poland, there will also be an increase in coal prices” – he explains.
– There is still pressure to increase fuel prices, which were approx. 10 percent. higher than in May. In monthly terms, food prices grew slower than in previous months, which was mainly related to seasonal factors. Core inflation, excluding food and energy prices, continues to grow, which is the result of earlier increases in the cost of energy, fuel and materials being passed on to retail prices, added Adam Antoniak, senior economist at the ING Bank’s Macroeconomic Analysis Bureau .
The worst is yet to come
The second half of last year was marked by dynamically growing inflation in Poland. The readings changed particularly quickly in the fall of 2021 and in the first months of 2022. This is a real drama for the budgets of Poles, who have to deal with huge increases in energy and gas prices, an avalanche in fuel prices and rising food prices. However, it seems that the worst is yet to come.
What increase in food prices can we expect? According to experts, in the coming months it may reach a level of up to 20 percent.
– Huge uncertainty still concerns food prices – we expect them to increase by approx. 20%. yy. in the second half of the year, but it cannot be ruled out that their dynamics will turn out to be even higher when the global grain shortages caused by the war in Ukraine will show their full effect in the autumn. At the moment, we are not able to accurately estimate this effect – says Piotr Bielski from Santander Bank.
– At the beginning of 2023, we will face another wave of increases in regulated prices, including electricity and gas – announces Adam Antoniak from ING Bank.
– It can also be seen from the data on producer inflation, which once again exceeded the level of 24%, that enterprises have and will continue to have increased costs of producing products and services, and thus will translate the increase in costs onto the consumer – says Mariusz Zielonka from Confederation Lewiatan. – Interestingly, the next GUS readings will probably show again that prices of services increased faster than prices of products. Food can be a positive surprise after all – she adds.
“We are approaching the peak of inflation”
How long will inflation keep growing? According to Piotr Bielski, we are already approaching its peak. – We predict that the highest level will be achieved in the summer months and it will be close to 16%. yy. Inflation rates may decline slightly later in the year and then rise again temporarily in early 2023, driven by sharp increases in energy prices. The average inflation this year will be over 13%, and in 2023 it will be only slightly below 10%. – says an expert of Santander Bank.
– Core inflation is still at a strong momentum, but in our opinion it should start to slow down in a few months due to a significant cooling of the economy and consumer demand. We expect a technical recession in Poland in the second half of 2022, which will have a cooling effect on the dynamics of wages and prices, he adds.