Prices of consumer goods and services in October 2024 compared to the same month last year increased by 5.0%. with an increase in service prices – by 6.7%. and goods – by 4.3 percent – the Central Statistical Office reported on Friday. A month earlier, prices grew at a rate of 4.9 percent, and two months later – 4.3 percent, so we are dealing with acceleration of inflation.
— Good economic situation in the sector [usług] and rising labor costs continue to drive rising prices. Therefore, core inflation will remain elevated and its slight increase is possible in the following months, comments Sebastian Sajnóg, senior analyst of the PIE economics team.
The October result is basically in line with forecasts and the flash reading from the end of October, but it is also the highest inflation since December 2023, when it was 6.2%. rdr.
Inflation in Poland – price dynamics year to year | Macronext
At the same time, the Central Statistical Office announced which goods are responsible for the acceleration of inflation. The report shows that this is due to the increase in housing costs, which increased by as much as 9.7%. y/y, mainly due to an increase in electricity bills after the partial unfreezing of regulated prices.
Central Statistical Office inflation in October 2024 | Central Statistical Office
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Detailed data presented by the Central Statistical Office shows that the most expensive increases during the year were butter (+21.9% yoy), electricity (+21.2%) and foreign tourism (+18.4% yoy). By 16.7 percent year-on-year, gas prices increased by 12.8%. water supply, and by 11.7 percent sewage services.
It’s not like everything has become more expensive. As much as 31.3 percent YoY, sugar became cheaper as a result of imports from Ukraine, by 12.9%. telecommunications equipment, by 9.2 percent audiovisual equipment, and by 9.1 percent fuel (coal, briquettes).
Monthly inflation 0.3 percent
On a monthly basis, prices went up by 0.3%, including the most: prices of clothing and footwear (+3.4% m/m), education (+2.1% m/m) and food and non-alcoholic beverages (+0 .7 percent).
The price of butter increased the most in October, by 3.9%. compared to September. Clothing prices increased by 3.5%. mdm, footwear by 3.1%, and car gas by 3.1%.
Backlogs in the fight against inflation
– Poland is lagging behind in the fight against inflation, which is shown by the high rate of monthly core inflation (approx. 0.4% m/m), but also by high projections of this indicator for 2025 in the latest NBP Inflation Report – comments Rafał Benecki, chief economist at ING BSK .
— On an annual basis, the base rate decreased to 4.1%. y/y from 4.3 percent y/y in September. Also, the unfreezing of regulated prices will further raise the CPI until March 2025. This will prevent rate cuts until then. Peak in March 2025 below 6%. y/y and the pessimistic scenario of the National Bank of Poland, because the price freeze is expected to be maintained in January 2026 – he adds.
— The beginning of 2025 will depend heavily on administrative decisions on energy prices. The November NBP projection indicates that the liberalization of energy prices will increase inflation in the first quarter of 2025 by 1.3 points to 6.6%. However, this scenario is very pessimistic – the government is designing solutions aimed at limiting the pace of changes. The latest forecasts of the central bank indicate that inflation will permanently return to the target only in 2026, points out Sebastian Sajnóg from PIE.
Inflation Insight: A Comedy of Prices
Ah, inflation! That delightful little gremlin that creeps into our lives while we sleep, making our morning coffee taste just a tad more bitter. The Central Statistical Office reported that prices of consumer goods and services in October 2024 compared to the same month last year have surged by a remarkable 5.0%. And as if that wasn’t enough, service prices have leapt even higher at 6.7%. Talk about inflation truly being a friend that’s overstayed its welcome!
How Many Times Can We Scream ‘Inflation’?
Let’s be real, folks: we’re not just reluctantly shaking hands with inflation; we’re doing a full-blown waltz! Prices grew at 4.9% a month earlier. Now, I don’t know about you, but when I see figures like that, I feel like I need a drink… preferably one that I bought last year at a much cheaper price! But no, we’re not at the end of the party yet. Sebastian Sajnóg, a senior analyst of the PIE economics team, has piped in suggesting our good economic situation and rising labor costs are driving this inflation train. Looks like someone’s been generous with the fuel! Or maybe they’re just filling their own tank while we sit back and watch the prices skyrocket.
Surprises in the Household
What’s causing this surge? Well, the report indicates an alarming increase in housing costs—by a whopping 9.7% year-on-year. Yes, folks, your electricity bills are not just high; they’re practically doing pirouettes off the ceiling! Those bills are dancing like it’s New Year’s Eve, especially after they decided to partially unfreeze those pesky regulated prices.
What’s Hot (and What’s Not)
Now, let’s talk specifics, because if you’re anything like me, you want to know where to hide your wallet. The biggest price hikes have been seen in essential commodities: butter is up by 21.9%, followed closely by electricity at 21.2%. And who could forget about foreign tourism—up 18.4%? You could say I have a newfound appreciation for my sofa; at least it didn’t cost me an arm and a leg! On the flip side, we do have some reprieve, as sugar has dropped 31.3% due to imports from Ukraine. Finally, some good news that doesn’t require a calculator!
The Monthly Rollercoaster
On a monthly basis, we’ve seen prices increase by 0.3%. And where’s the most notable increase? Take a wild guess—it’s clothing and footwear, up 3.4% month-on-month. Because when your electricity bill hits the roof, naturally, you’d want to comfort yourself with a new pair of shoes, right? Sounds logical to me!
Down the Rabbit Hole of Projections
Now, economists are predicting a bit of a rough patch ahead. Rafał Benecki, chief economist at ING BSK, warns that Poland is lagging behind in its fight against inflation. That’s like running a marathon and falling asleep at the finish line! The current monthly core inflation is hovering around 0.4% m/m, and they expect an uphill battle until 2026 before we see any semblance of stability. It seems optimistic that the rate cuts will be part of our New Year’s resolutions. Spoiler alert: they won’t.
The Energy Price Victors
As we look to the future, the energy prices painted a rather dire picture. The November NBP projection suggests even more inflation due to energy price liberalization. Think of it like someone releasing a pack of wolves into the chicken coop—chaos ensues! But fear not; the government is attempting to rein in this inflation monster with solutions yet to be announced. Do I feel optimistic? Let’s just say my crystal ball is looking a little cloudy.
So, here we are, folks—navigating through rising prices, inflated bills, and cautiously optimistic projections. One thing is for sure: it’s never a dull moment in the world of economics. And always remember, laughter is the best medicine, especially when you’re confronted with your shopping bill!
Prices of consumer goods and services in October 2024 saw a notable increase of 5.0% compared to the same month last year, reflecting continuing economic pressures. This rise was driven by a substantial jump in service prices, which soared by 6.7%, while goods recorded a more modest increase of 4.3%. According to the Central Statistical Office’s report released on Friday, the inflation rate in the preceding month was lower at 4.9%, and further back, it was recorded at 4.3%. This consistent uptick clearly indicates that inflation is accelerating and presents challenges for the economy.
— The current economic situation in the service sector, coupled with rising labor costs, plays a significant role in fueling price increases across the board. As a result, core inflation is expected to remain elevated in the months ahead, with a slight uptick anticipated, comments Sebastian Sajnóg, a senior analyst from the PIE economics team.
The price increase reported for October closely aligns with forecasts and preliminary estimates from late October, but it also marks the highest level of inflation recorded since December 2023, when it peaked at 6.2% year-on-year.
At the same time, the Central Statistical Office released details identifying specific goods contributing to this inflationary trend. Notably, housing costs surged by an astonishing 9.7% year-on-year, notably sparked by increases in electricity bills following the partial unfreezing of regulated prices.
Detailed data compiled by the Central Statistical Office highlights the most significant price increases over the year, with butter experiencing the steepest rise at +21.9% year-on-year, followed closely by electricity at +21.2% and foreign tourism at +18.4%. Gas prices also climbed, with a year-on-year increase of 12.8%, and water supply charges rose by 11.7%.
It’s worth noting, however, that not all goods have seen price hikes. In a noteworthy development, sugar prices fell dramatically by 31.3% year-on-year, largely due to increased imports from Ukraine. Additionally, prices for telecommunications equipment dropped by 12.9%, audiovisual equipment declined by 9.2%, and coal and briquettes saw a reduction of 9.1%.
On a monthly basis, prices saw a modest uptick of 0.3%. The categories most affected by these increases included clothing and footwear, with prices climbing by 3.4% month-on-month, followed by significant hikes in education costs at +2.1% and food and non-alcoholic beverages increasing by 0.7%.
The price of butter saw the steepest rise in October, escalating by 3.9% compared to September. Clothing prices followed closely with a rise of 3.5%, while footwear increased by 3.1%, reflecting the ongoing inflationary pressures across various sectors.
– Poland is currently lagging in effectively managing inflation, as evidenced by the persistently high rate of monthly core inflation, which stands at approximately 0.4% month-on-month. Furthermore, projections of this indicator for 2025, as detailed in the latest NBP Inflation Report, indicate concerns amongst economists, including Rafał Benecki, chief economist at ING BSK.
— On an annual basis, the base inflation rate has decreased to 4.1% from 4.3% year-on-year in September. The recent unfreezing of regulated prices is expected to exacerbate the Consumer Price Index (CPI) until March 2025. This development will stall rate cuts at least until then. The peak is anticipated in March 2025, with expectations of falling below 6% year-on-year, although there are pessimistic projections from the National Bank of Poland due to expected price controls persisting until January 2026.
— The trajectory of early 2025 will be heavily influenced by administrative decisions concerning energy prices. According to the November NBP projection, the liberalization of energy pricing could lift inflation in the first quarter of 2025 by as much as 1.3 percentage points, pushing it to 6.6%. However, this scenario is often viewed as overly pessimistic, with the government exploring solutions aimed at mitigating the pace of such increases. Central bank forecasts suggest that inflation may only return to target levels by 2026, as noted by Sebastian Sajnóg from PIE.
What strategies can households adopt to cope with rising utility bills and inflation?
2.1% monthly increase, as households looked for comforting buys amid rising utility bills. It seems that even in trying times, we still find ways to indulge, albeit perhaps against our better judgment.
As we look ahead, economists are warning that the inflationary pressures we’re experiencing now may only intensify in the near future. Rafał Benecki, the chief economist at ING BSK, highlights the sluggish pace at which Poland is addressing this inflation issue. With core inflation showing little sign of abating, it appears the discomfort is a long-term affair, and we’re not looking at a quick respite.
Additionally, projected changes in energy prices could inject further volatility into our economy. The expectation is that energy price liberalization might usher in an uptick in inflation rates heading into 2025, particularly if administrative decisions favor liberalization over regulatory stability. The government’s attempt to reconcile energy pricing concerns will be pivotal, according to analysts.
In light of these developments, it’s clear that economic challenges are ahead. Society must prepare not just for rising costs but also for navigating the complexities of a shifting economic landscape. As we manage our finances, let’s keep an eye out for potential interventions from policymakers designed to ease the burden—while also hoping for a slight reprieve from the continuous price hikes.
Ultimately, while economic predictions may seem daunting, remaining informed while maintaining a sense of humor about it all can help ease the burden of this inflation rollercoaster. Here’s hoping for brighter days and more stable prices ahead, as we all aim to keep our pockets intact and our spirits high!