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Inflation in Poland. Experts: our wallets have been drained

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Even inflation of six to seven percent becomes difficult to bear after such a long period of time. Our wallets have been drained – said Kazimierz Krupa, an economic journalist from the Drawbridge Law Firm, in the Christmas edition of “Fakty po Faktach”. – It’s hard to say that we have cheap holidays – said Dr. Małgorzata Starczewska-Krzysztoszek from the Society of Polish Economists, a lecturer at the University of Warsaw. – It will be very difficult for households to make ends meet – added Professor Marian Noga, economist, former member of the Monetary Policy Council, talking about the prospects for 2024 and 2025.

Inflation in November 2023 was 6.6 percent year-on-year – reported the Central Statistical Office (GUS). Compared to October, prices increased by 0.7 percent. Core inflation in November decreased to 7.3 percent year-on-year from 8.0 percent a month earlier – the National Bank of Poland reported.

Starczewska-Krzysztoszek: it’s hard to say that we have cheap holidays

The situation was commented on in the Christmas edition of “Fakty po Faktach” by Dr. Małgorzata Starczewska-Krzysztoszek from the Faculty of Economics of the University of Warsaw and the Society of Polish Economists. – If we have inflation at a level of nearly seven percent, which means that in November we paid, on average, seven, almost seven, 6.6 percent more for all the goods we bought, so it is difficult to say that we have cheap holidays, she said.

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– Some research has been done now, (…) how they are coping, how they (Poles – ed.) will cope with preparations (for the holidays – ed.). And they showed that we have limited our expenses, both on gifts and food, and that we do it in a more thoughtful way – she continued.

– Maybe it’s not a total reduction in spending, but it’s definitely a very thoughtful way of spending. Does this happen in all households? Probably not, but probably in many, especially those from lower income households, the preparation for the holidays and the current celebration were probably more modest, she added.

Krupa: our wallets have already been drained

As Kazimierz Krupa, an economic journalist from the Drawbridge Law Firm, said, this year’s holidays “unfortunately are very expensive.” – They are very expensive for one simple reason, of course we are coming down from this very high inflation. But firstly, 6.6 percent means that it is still very high, and secondly, I compare inflation to the temperature in the human body. If it jumps to 39 and even drops to 36.6, you’ll get back together. However, if its temperature is 38.5, and we have had it for years, the body is devastated. Our needs are just as devastated, he said.

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– We feel it more because it has been going on for so long. So, in short, our wallets have already been drained, our resources have already been drained. Therefore, now even relatively low (inflation – ed.) is very troublesome – he continued.

Christmas edition of “Fakty po Faktach”TVN24

The inflation target set by the National Bank of Poland is 2.5 percent. – We are still very far from reaching the inflation target and the worst thing is that we have little prospect of reaching this inflation target. So, in short, it will last for a very long time, certainly the whole of next year, and probably even 2025, Krupa said.

Noga: it will be very difficult for households to make ends meet

As Professor Marian Noga, an economist and former member of the Monetary Policy Council, said, “there is nothing to be happy about.” – We have the last inflation report of the National Bank of Poland from November this year and it is clearly indicated that, for example, in the fourth quarter of 2025, when we should already be at the target, i.e. 2.5 percent (inflation – ed.), there is clearly writes that it is 3.7 percent, so we will most likely reach the target only in 2026 – he said.

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– Secondly, of course the result is better than what I said last year, that (inflation – ed.) will be around eight percent, and it is seven percent, but the declines from this level will not be too high. There may still be a decline in January or February, but somewhere in March or April there may be a rebound again, he continued.

– Next year we will still have an inflation rate of between six and seven percent and this will show us that it will be very difficult for households to make ends meet, although in fact, if there is no further increase in inflation, it would be a positive conclusion and effect – he added.

“It will be a very good year for the Polish economy”

Answering the question about how funds from the National Reconstruction Plan will help the economy in the new year, Starczewska-Krzysztoszek said that they will “greatly” improve the condition of the Polish economy. – These are funds intended for investments – she emphasized.

– This will be a very good year for the Polish economy. Firstly, because of the KPO, secondly, because of the release of money from the Community Fund, and thirdly, because of the honeymoon period, which will be longer for the government, Krupa said. He noted that our currency is strengthening and good signs for the economy always come when “the democrats return to power.” Then the enthusiasm accompanying the change is like a “self-fulfilling prophecy,” he said.

Marian Noga said that development forecasts for the world on a global scale have been reduced in recent months from 2.9 percent. up to 2.7 percent, in USA an increase of 0.9% is expected, a Germany – Poland’s largest trading partner – they may even experience a recession. However, Poland may find itself in a good situation.

– I have seen analyzes of some large banks showing that Poland can be a world leader and have (growth – ed.) even 4 percent – he said, noting that the government is currently counting on a 3 percent growth of the economy.

Main photo source: Shutterstock

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