Polish inflation to reach its peak of 8.8 percent in January – analysts

The Consumer Price Index (CPI) in Poland will reach 8.8 percent in January, as inflation should start to decrease in February, the Polish Economic Institute (PIE), government think-tank, has forecast.

The Central Statistical Office (GUS) reported on Friday that prices of consumer goods and services increased by 8.6 percent year on year in December 2021.

According to GUS, CPI in December was mainly driven by housing prices (up by 10 percent year on year), food prices (up by 8.7 percent), and costs of transportation (up by 22.7 percent).

PIE economists estimated that Poland’s core inflation, excluding the prices of food and energy, would measure 5.2 percent in December 2021.

The think tank forecast that prices in Poland will start to decrease in February. "Price growth will be curbed by the government’s anti-inflation shields and the stabilisation of prices on global energy commodities markets," the PIE analysts noted.

They also estimated that the VAT reductions prepared by Poland’s government, reducing the tax rate on foods and fuels, should decrease the inflation by 1.6 percentage points in H1 2022. Moreover, the gradual unblocking of global supply chains will help reduce the pressure on commodity prices all over Europe, including Poland, they added.