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Inflation in Poland 2023. What next for food prices? Jakub Olipra about forecasts

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Food prices are expected to grow more slowly. The average growth rate of food and non-alcoholic beverage prices in April will slow down slightly, but will remain at a high level, said Jakub Olipra, senior economist at Credit Agricole. However, he added, there are signs that the worst is behind us.

From the preliminary data from the Central Statistical Office published on Friday shows that in March this year. Food and non-alcoholic beverage prices increased by 24%. Every year. The same average annual price growth rate was recorded in February.

– We forecast that the dynamics of prices of food and non-alcoholic beverages in April will amount to approximately 19% year-on-year, compared to 24.0% in February this year, Jakub Olipra, senior economist at Credit Agricole Bank Polska, told the Polish Press Agency. As he pointed out, this means that the price growth rate will slow down slightly, but will remain at a high level.

Food prices are rising

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Olipra noted that this is an average rate of price growth, which for a number of products increases much more strongly. According to the data of the Central Statistical Office, for example, sugar was 85.2% more expensive in February. year on year, milk by 37.8 percent, eggs by 35.6 percent, pork by 33.5 percent, and vegetable fats by 31.6 percent.

– Looking at the composition of traditional dishes, we are primarily interested here prices: sugar, eggs, flour, oil, meat, vegetables. These are product categories that are currently very expensive. As a consequence, we can assume that mayonnaise, sausage, vegetable salad or Christmas pastries will be at least 30 percent more expensive on an annual basis in the coming holidays, assessed Jakub Olipra.

The economist drew attention to a number of factors contributing to the increase in food prices. In recent quarters, the prices of agricultural commodities have increased, e.g. due to war in Ukraine. – Added to this is all the cost pressure we see in food processing associated with high prices energy prices, rising labor and transport costs, he noted. However, as he emphasized, “there are many indications that the worst is behind us.”

– In the following months, we forecast a gradual decrease in the growth rate of food and non-alcoholic beverages prices, supported by falling prices of agricultural commodities. We assume that the cost pressure in the economy will also decrease, the economist said.

As a consequence, in his opinion, at the end of the year the growth rate of food prices will fall to a single-digit level. Olipra noted, however, that this does not mean that food will become cheaper, but it will become more expensive at a slower rate.

Main photo source: Albert Zawada/PAP

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