– The inflation index, slightly higher than the median of analysts’ prognoses, is a moderately positive sign that the deflation processes have not gathered pace – Łukasz Kozłowski, expert of Employers of Poland comments latest GUS figures.
The annual growth dynamics of the prices of foods and consumer services in June was measured at 0.3 percent, show the latest GUS figures. In comparison with May prices remained unchanged. In the last month food prices fell by 0.3 percent and telecommunications services got more expensive by 2.4 percent.
One can hope that inflation will slowly start to grow, as the economic revival progresses, a prolonged decrease in prices could have a harmful impact on Polish economy. However, the possibility of deflation appearing in July figures is very real, particularly due to the high basis effect, resulting from the coming into force of the garbage act last year, which caused the prices of garbage disposal to rise by over 47 percent and the general inflation index to rise rapidly as well.
Low inflation in Poland has been a reality for a long time, while in many countries the tempo of price growth in many countries has increased. For example, in Great Britain the dynamics of consumption prices reached 1.9 percent which caused speculation about the possibility of increasing interest rates. Meanwhile, in Poland a decrease in interest rates is still the more likely scenario – the Monetary Policy Council may cut the reference rate as early as September.
Łukasz Kozłowski, expert of Employers of Poland