Global and National Inflation Overview

Following two unanticipated surprises for National Inflation- the Covid-19 pandemic and the Russian armed aggression against Ukraine – global inflation has increased since the beginning of 2021.

Thus, the rise in inflation in most economies in the recent period has global sources, which means that disinflation is not possible without global measures. In other words, reducing price growth requires action to be taken by major central banks. These measures are already being taken: the Fed has been raising interest rates significantly since March, and the ECB made the first interest rate hike in 11 years in July.

The Major Factors for the Impact of National Inflation:

Polish economy coped with the pandemic well, in Q1 this year GDP exceeded the pre-pandemic level by more than 8%, while some economies, including Germany, did not reach the pre-pandemic level. Such a dynamic recovery of economic activity is an absolute success, although it also creates fertile ground for a stronger increase in prices as a result of global pro-inflationary shocks.

According to the prior estimate of the Central Statistical Office, the dynamics of consumer prices in Poland in July 2022 amounted to 15.5%, so it did not change compared to June this year, which may indicate that the national inflation growth has slowed down.

Although a temporary decline in GDP on a quarterly basis cannot be ruled out, Poland is certainly not in danger of an economic downturn. It is expected that after several quarters of weaker activity in the second half of 2023, economic growth will accelerate again.

It can be said that national inflation, understood as an economic process, has already reached its peak, although statistically, price growth may still be temporarily boosted by regulatory factors, including increases in electricity and gas tariffs related to earlier increases in commodity prices. In 2024, the price growth will be significantly lower and in the last quarter of this year, it should return to around 3.5%, i.e. the upper limit for deviations from the inflation target.

Implications for Banking and Business

Developments in the Polish banking sector affect businesses operating in the country in several ways. Access to corporate banking services, credit availability, deposit rates, and payment infrastructure are all critical factors for companies — whether established Polish firms or foreign-owned entities entering the market.

For foreign entrepreneurs setting up operations in Poland, choosing the right banking partner is a strategic decision. Major Polish banks including mBank, ING Bank Śląski, Bank Millennium, PKO BP, and Santander Poland offer varying levels of service for international clients, including English-language online banking, multicurrency accounts, and dedicated relationship managers for corporate clients.

The Polish banking market is well-regulated by the KNF (Financial Supervision Authority) and participates in the EU deposit guarantee scheme (BFG — Bank Guarantee Fund), providing deposit protection up to EUR 100,000 per depositor per institution. This regulatory framework provides stability and confidence for businesses maintaining corporate funds in Polish banks.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our corporate tax advisory, or contact us for a free consultation.