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POLAND: Inflation expected to rise

The National Bank of Poland forecasted a 2,5% inflation benchmark for 2019 – at such a pace prices of goods and services should increase so that the economy can develop steadily. However, according to experts, inflation in Poland may reach 3% – a record level since 2012. This is a result of a number of factors. Firstly, fuel and energy prices are continuously increasing, making the production of goods more expensive – the food production sector is especially vulnerable to changes in energy prices. Secondly, the costs of employment have increased (minimum wage, taxes and insurance). In conjunction with the shrinking labour market, employers are forced to compete for employees, consequently offering higher remuneration.
For the past two years, inflation in Poland fluctuated at a stable level under 2,5%, peaking in the last quarter of 2017. Representatives of the National Bank and Council for Monetary Policy are confident that increasing energy and fuel prices are accounted for in their prognosis, and that inflation will not exceed the official forecasted level. For private consumers, an increasing inflation will be most noticeable in the basic basket of goods. Politically, this may cause certain dissatisfaction, especially amongst persons who do not benefit from growing wages, such as pensioners.