Inflation hits hard at year’s end

The annual inflation indicator shows an increase to 3.6 percent in November. Inflation stood at 3 percent in October. Analysts are predicting December will see a rise in prices as high as 3.7 to 4.1 percent.

According to the Inflation Report published in October 2007 by the National Bank of Poland and the Monetary Policy Council, the annual index of consumer goods and services prices has been steadily growing since 2006. In 2007 inflation was subject to considerable fluctuations – in August coming down to 1.5 percent, and rebounding to 2.2 percent in September.

The National Bureau of Statistics (GUS) indicated the prices were 3.6 percent higher than the prices for the same time last year.
Within the one month, foodstuff prices rose overall by 1.6 percent, compared to the previous month.

Vegetables prices rose by 10 percent, rice by 3.4 percent and butter by 3.3 percent.

The overall rise in petrol prices also indicated the increase in public transport costs by 1.3 percent since October. According to economists, the current inflation continues to be affected by two opposing trends.

A rise in demands on the domestic market, a tighter labor market and an increase in food prices all contribute to the overall price growth. The other factor is globalization and how it affects Poland’s economy, increasing competition within the local market and in the telecommunication sector. Along with food price and petrol price increases, housing costs have also risen within the last month, affecting the inflation index.

The November statistics show that inflation has risen for the first time since 2005 above the average indicator that is accepted by the Monetary Policy Council. The acceptable average in the inflation cap goal is 2.5 percent. The Council accepts sways in the indicator up to 3.5 percent.

Inflation is predicted to be stablize from April and drop down to 3.4 percent by the end of the year.