Ukraine war almost entirely to blame for inflation jump in March, says Polish central bank chief

The economic fallout from Russia’s war in Ukraine is almost entirely responsible for the rise of inflation to double-digit levels in Poland, says central bank governor Adam Glapiński.

Headline inflation (CPI) surged to 11% year-on-year in March, according to Statistics Poland (GUS), a state agency. That is the highest level since 2000 and up from 8.5% in February.

Meanwhile, core inflation, excluding food and energy prices, rose in March to 6.9% from 6.7% in February, according to data published by the National Bank of Poland (NBP) today.

Even before Russia’s invasion of Ukraine, Poland had the EU’s joint-highest level of inflation in 2021 and was forecast to have the highest this year. But the situation has been made worse by the war, says Glapiński.

“Based on data published by GUS, one may estimate that the increase in CPI inflation in March this year is almost entirely due to the impact on the Polish economy of Russia’s military aggression against Ukraine,”  he told the Polish Press Agency (PAP) in e-mailed comments.

According to Glapiński, the war increased Poland’s consumer inflation in March by 2.4 percentage points.

“The record increase in prices of fuels for private means of transport (up by 28.1% m/m in March this year) following the dynamic growth of crude oil prices on global markets and temporary depreciation of the zloty justifies this assessment,” Glapiński said, also citing rising prices for LPG, other energy commodities, food and non-alcoholic beverages.

The central bank governor also mentioned the increase in prices of selected non-food products whose supply was limited due to disruption in global supply chains and international transport as one of the culprits.

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.