Poland’s inflation rate accelerated to 4.66% year-on-year in February, which is the largest increase since November 2011, reported Business Insider.
Poland has thus risen to fourth place in the Bank for International Settlements’ (BIS) ranking of 60 countries by inflation – the highest it has been since 1990, when prices officially jumped by 594% at the beginning of Poland’s transition to a free-market economy.
Ahead of Poland in the BIS ranking are only Argentina (51.5%), Turkey (12.4%) and India (6.6%).
W lutym 2020 r. #ceny towarów i usług konsumpcyjnych w porównaniu z lutym 2019 r. wzrosły o 4,7% (wskaźnik cen 104,7), a w stosunku do poprzedniego miesiąca – o 0,7%.https://t.co/XImpDEl8gB#GUS #CPI #WskaźnikCen #statystyki #inflacja pic.twitter.com/GF86JZ68AU
— GUS (@GUS_STAT) March 13, 2020
Poland’s inflation has been steadily increasing in recent months. December’s figures showed it at its highest level since 2012, with a year-on-year rate of 3.4%. In January inflation rose again to 4.4%, according to Statistics Poland (GUS).
The situation has been driven mainly by rising food prices, according to Business Insider. Fruit and vegetables make up 4.72% and meat 6.14% of the basket of goods used to measure Consumer Price Index (CPI) inflation, together accounting for 10.86%.
While in last year’s Eurostat data, Poland was still the cheapest meat and dairy products in the EU, that could soon change. The price of pork has increased by 24.9% year-on-year, largely due to African Swine Fever (ASF) which decimated Chinese pork production in 2018 and limited global supply for the foreseeable future.
Meanwhile fruit and vegetables have become 18.7% dearer than last year, in part due to the lasting effects of droughts in previous years. Moreover, there is growing demand for Poland’s fruit and vegetable exports, putting pressure on domestic prices.
Another factor contributing to pricier goods is the country’s government-led minimum wage hike. In January, the minimum wage rose to 2,600 zloty a month, a jump of 15.6%. This is the first stage in government plans to almost double the wage floor by 2023, from 2,250 zloty today to 4,000 zloty. (Those plans may, however, be curtailed by the coronavirus crisis.)
Moreover, in February, the average salary in the business sector in Poland rose by 7.7% year-on-year, reaching 5,330.48 zloty (€1,163), according to fresh data from GUS. An increase in production and delivery costs is thus passed onto the customer in the form of higher prices.
The issue of inflation was set to feature in the campaign for May’s presidential election, before the coronavirus came to dominate the agenda (and prevent candidates from holding events). Incumbent Andrzej Duda, who is seeking reelection, argued that Poland’s high inflation is “temporary” and caused by global events including the crisis in the Middle East.
However, the main opposition candidate, Małgorzata Kidawa Błońska, accused Duda of trying to “keep quiet” about the issue of rising prices and called on him to “intervene, ask questions and inform Poles”. Yet she did not herself outline any specific actions to be taken, reported financial news website Forsal.
Main image credits: Artem Beliaikin/Flickr (under public domain)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
