According to most recent GUS data, October was the fourth consecutive month in which we dealt with deflation. – The decrease in consumer prices do not appear to be coming to an end – what is more, it seems to have intensified – comments expert of Employers of Poland Łukasz Kozłowski
Thankfully, that does not mean that Polish economy is entering a period of stagnation. The deflation we are currently observing has a supply background, not a demand background. In comparison to last month, prices have remain at the same level, which means that the change of the annual indicator results from the statistical base effect. The CPI index has a negative value mainly due to decreasing food and energy prices, which is a result of the current situation on raw material markets rather than internal factors. It is worth noting that inflation is not only above zero, but its growth rate has systematically increased since July. In such a situation, decreasing prices may have a positive impact on GDP dynamics in Poland. Real consumer income is starting to grow at relatively fast rate which should translate to increased retail sales, while cheaper fuels and energy sources contribute to lower costs of goods produced by entrepreneurs. All this shows that deflation figures should not be a cause for concern yet.
expert of Employers of Poland