Inflation in Poland is at the highest level since June 2001. – I’m afraid of this inflation. I don’t know if she will be much taller. I know that 5 percent is very much a year – said Andrzej Olechowski, former finance minister, in “Fakty po Faktach” on TVN24. As everyone has pointed out, he can see that the prices have gone up, “regardless of his basket”.
According to the data of the Central Statistical Office, the prices of consumer goods and services in August 2021 increased year-on-year by 5.5 percent, and compared to the previous month, prices increased by 0.3 percent. Inflation was last higher in June 2001 at 6.2 percent.
Andrzej Olechowski was asked how much Poles should worry about the highest inflation in 20 years. – There are two schools. One is economists with more classical education and the other is more risky. People like me think that inflation at the level of over 5 percent today is cause for concern. It is the reason for the expectation that since it has already increased to 5 percent, it will increase more, therefore I am ahead of this expected inflation, this increase – explained the former finance minister.
As he noted, “that’s what producers and consumers do.” – Consumers buy things they would not otherwise buy; producers set prices higher, because he says, “he will deliver it in a month, then the prices will be higher”. And that’s how it goes. It goes up especially when the unemployment level is low, because then it also translates into wages and this is how it drives – said Olechowski.
Inflation in Poland – Andrzej Olechowski comments
Referring to the current level of inflation, he pointed out that “five percent is felt and we can see it, all of us can see it, regardless of his basket, that prices have gone up”. – So it is worrying – commented the guest of “Facts after Facts” on TVN24.
On the other hand – as he said – “national banks of large countries say this inflation will fall, it is temporary”. When asked about his forecasts, Olechowski replied that he was afraid of this inflation. – I’m afraid of this inflation. I don’t know if she will be much taller. I know that 5 percent is very much a year, it eats terribly – he pointed out.
The former finance minister also pointed to one problem. – I have experienced years of very high inflation. When I was Minister of Finance, inflation was galloping at an amazing pace. I lived through such a period, therefore I know how to behave with it, while young people now know inflation only from books. You would have to read old books that describe how to live in such times not to make many mistakes – assessed Andrzej Olechowski.
Interest rates in Poland
– If I had something to advise the president of the National Bank of Poland today, I would say that, however, perhaps we need to reassure less that there will be no inflation, but rather prepare a little people for the fact that there will be interest rate hikes at some point, because it will have to happen – he said.
In the opinion of Olechowski “there is nothing worse, because it breaks down trust in the institution, when someone says it will not happen, it will not happen, and ultimately has to implement it”. – It is then very bad for the reputation of institutions and the economy, because if people stop believing the president of the National Bank of Poland, then the economy turns worse – assessed the former head of the Ministry of Finance.
During the September meeting, the Monetary Policy Council, chaired by the NBP president Adam Glapiński, decided to keep interest rates unchanged. This means that interest rates remain at their lowest ever. The reference rate is 0.10 percent. on an annual basis. The next MPC decision meeting is scheduled for October 6.
The decisions of the Council affect the wallets of Poles. In the event of a reduction in interest rates, borrowers can expect lower loan installments. At the same time, very low interest rates – currently the lowest in history – are also a symbolic interest rate on money that we put on a deposit or savings account.
Main photo source: TVN24