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Inflation in Poland was the highest in 20 years. “They are really dangerous phenomena”

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The scale of incompetence and carefree confusion in people’s minds is remarkable. These are really dangerous phenomena – said the former prime minister, currently Member of the European Parliament Marek Belka, about the statements of the government representatives on inflation. – With inflation over 5%, we have a 9% increase in wages. This heralds that inflation will be even faster – he said in “Rozmowa Piaseckiego” on TVN24. As he explained, high inflation “complicates economic activity”.

– Inflation 5.5 percent – the highest both in the European Union and in Poland for 20 years – it is impressive, it must make an impression. For me, the most important thing is that in Poland we are not dealing with a one-off price spike – even one lasting for some time, several months or several quarters. We are dealing with a process – he assessed.

Belka: it is simply a wage-price spiral

– What does it mean? What they boast about is simply embarrassing, some specialists from our government, that wages are rising faster than prices – this is simply a wage-price spiral. If, with inflation exceeding 5%, we have a 9% increase in wages, it heralds that inflation will be even faster. I don’t know if 5, 6 or 7 percent. At some point (it) will get out of control – he said.

– The scale of incompetence and carefree confusion in people’s minds is extraordinary. These are really dangerous phenomena – said Marek Belka.

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Earlier, at the end of July Prime Minister Mateusz Morawiecki arguedthat “inflation is an issue to be related to wage growth.” – These issues require a very specific juxtaposition with each other. Today, despite this increase in inflation, which worries us, people can buy more items and this is the basic dependency that must be taken into account, said the head of government.

Marek Belka explained in “Rozmowa Piasecki” on TVN24 that “with high, (even) single-digit inflation, economic activity becomes very complicated”. – Private sector investments in such a situation are burdened with high risk and this puts us in stagnation in the long run. The problem is that PiS is not afraid of the long run, in the long run it is known that the opposition will rule and will have to deal with this mess – he emphasized.

When asked about interest rates, he said that, first of all, he would “change the narrative”. – I would announce a raise and I would introduce one signal immediately to change the market attitude – said the former president of the National Bank of Poland.


Inflation in Poland according to the Central Statistical Office and Eurostat

The prices of consumer goods and services in August 2021 increased by 5.5 percent year-on-year, and compared to the previous month, prices increased by 0.3 percent, the Central Statistical Office recently reported. This means that the price increase has accelerated to a level that has not been seen on the Vistula River for over twenty years.

Inflation in AugustPAP

According to Eurostat data, inflation in the European Union stood at 3.2 percent year on year in August, up from 2.5 percent in July. The prices rose the most in Poland, Estonia and Lithuania. Inflation in August in each of these countries was 5 percent year on year.

Inflation in the European UnionPAP / Maciej Zieliński

Main photo source: Shutterstock

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