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Inflation in Poland and recession. “Undoubtedly, we will all feel the slowdown”

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Undoubtedly, we will all feel the slowdown – said the leader of the Deloitte economic analysis team, Julia Patorska, in the TVN24 program “Get up and weekend” on TVN24. However, she added that the Polish economy is not in danger of a recession because “we are saved by the labor market, which is very beneficial for employees”.

According data of the Central Statistical Office (GUS) inflation in June was 15.5 percent on a year-on-year basis. This is less than stated in the so-called quick estimate. According to detailed data, fuel prices increased by 122 percent year on year, and gas prices increased by 46.2 percent. June inflation at 15.5 percent is the highest since March 1997, over 25 years. The price increase was then 16.6 percent.

Inflation in PolandPAP / Maciej Zieliński

– Inflation is a huge unknown. When we even think about our home budget and want to make a decision to buy a flat or a house, it is much more difficult to make such a decision. Because we do not know how these prices will develop. We do not know what our remuneration will look like. If wages continue to rise as fast as inflation, we had this opinion before, let’s say our real income does not change. We know, however, that it is not true – said Patorska.

Inflation in Poland. “We are unable to ask for a raise every month”

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She noted that “we are unable to go to our employer every month to ask for a raise to moderate the rising prices.”

– Not only that, we have a number of people in the economy who, in principle, are fully dependent on the decisions of other institutions. I mean retirees, disability pensioners, or even the budgetary sphere, where these salaries or incomes (…) clearly do not go up with inflation. Usually, valorization takes place over time and in fact real income goes down, she said.

According to the expert, “there is a much bigger problem in the sphere of enterprises”. – As entrepreneurs, we should invest as much as possible. It is investments that make us grow as an economy in the long run. That we can at least develop the budget sphere from these increases, build new roads, schools and hospitals – explained Patorska.

– When inflation is so high, it is very difficult to invest and pursue a policy that would lead to economic growth. As a result, we come to points where, on the one hand, we have high inflation, and on the other hand, economic growth is limited and we are actually poorer – she explained.

The specter of a recession in Poland. “Such a difficult situation does not await us”

The expert was asked whether the specter of a recession hangs over Poland. – If we are talking about such a technical recession, i.e. two quarters in a row when the GDP value does not increase, it is actually in two quarters, perhaps in the next one, we will observe such a phenomenon – she said.

– When we think about a recession in a more common sense, i.e. that many people lose their jobs, have big problems with making ends meet, they are not enough until the end of the month, I think that such a difficult situation will not await us – she predicted.

According to the expert, “we are saved by the labor market, which is very beneficial for employees”. – As a rule, we still have very low unemployment. There are industries where there is a shortage of workers and this means that we are unlikely to see violent bankruptcies, such violent situations in which it will be really, very difficult for people – she assessed.

However, as she emphasized, “we will all undoubtedly feel the slowdown”. – It’s actually already visible. Among other things, these rising prices. This means that we can afford less on the same income that we get a month – she noted.

Main photo source: Grand Warszawski / Shutterstock

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