Poland's inflation hits new highs - think-tank

Poland's inflation rate is breaking new records, the Polish Economic Institute (PIE), an advisory body to the government, has said in a comment on fresh CPI data.

The country's statistical office reported on Friday that prices of consumer goods and services (Consumer Price Index, CPI) rose by 5.9 percent year on year and by 0.7 percent month on month in September 2021.

"Inflation continues to hit new highs and price increases affect a wide range of goods and services," PIE wrote in a Friday commentary.

According to analysts, this situation will continue until the end of the year.

They said that although, primarily, the rate of food price growth was a negative surprise, core inflation was also rising.

"The CPI is still driven by very high fuel costs with prices 28.6 percent higher than a year ago... the rise in food prices also accelerated to 4.4 percent last month... while core inflation increased from 3.9 to 4.1 percent," PIE wrote.

According to PIE, a near-term inflation spike can be expected due to the surge in natural gas prices, which will translate into higher costs of fertilisers and agricultural production.

Analysts forecast that food price hikes will likely take place in the spring of 2022 and CPI inflation will hover around 6 percent by the end of the year. They expect it to slow down at the beginning of next year, along with a lower increase in fuel prices.

PIE forecasts a gradual decline in core inflation in 2022.