Poland’s Inflation Stabilizes at 8.2%, Decline Expected in October

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Higher Interest Rates

The Central Statistical Office of Poland has confirmed that the nation’s inflation rate for September 2023 stands at 8.2% on an annual basis, maintaining consistency with the flash estimate released at the end of September. This is a significant development as it marks the first time in over a year that single-digit inflation has been recorded in Poland. The last time this occurred was in February 2022, coinciding with the outset of the war in Ukraine when inflation stood at 8.5%. Since then, inflation rates soared, hitting a record high of 18.4% in February of the current year.

In terms of category-based analysis, the report reveals that the increase in prices for services on an annual basis amounted to 9.7%, while goods experienced a 7.6% increase. In comparison to the previous month, the prices of goods and services saw a 0.4% decline, with goods decreasing by 0.5% and service prices by 0.2%.

September’s inflation data unveiled a decline in prices within the transport sector by 2.9%, health by 2.6%, food by 0.4%, and recreation and culture by 1.5%. This reduction had a notable impact on the consumer price index, contributing to a 0.26 percentage point decrease, 0.15 percentage point decrease, 0.11 percentage point decrease, and 0.09 percentage point decrease, respectively. Conversely, higher prices were recorded in clothing and footwear (2.5%), education (4.9%), and restaurants and hotels (0.7%), contributing to a 0.1 percentage point increase, 0.06 percentage point increase, and 0.04 percentage point increase.

When compared to the same month in the previous year, food prices increased by 10.1%, and housing prices by 9.2%, contributing to an increase of 2.49 percentage points and 2.32 percentage points, respectively. In contrast, lower transport prices, down by 2.8%, resulted in a 0.27 percentage point reduction.

Adam Glapiński, the head of Poland’s central bank, anticipates a promising trajectory for inflation. In an interview with a right-wing weekly, Glapiński noted that the current decline in inflation is in line with the central bank’s forecasts. He predicts that inflation will dip below 7% in October. Glapiński emphasized that the nation’s inflationary challenges were a result of external crises, including the pandemic, the war, and energy-related shocks. He commended the swift response to the crisis, citing that Poland was one of the first nations, following the Czech Republic, to raise interest rates significantly from 0.1% to 6.75% to mitigate the consequences of rising inflation.

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