Inflation in Poland in October 2022 - forecasts of economists

Consumer price inflation (CPI) in September of this year was 17.2 percent. every year – The Central Bureau of Statistics announced two weeks ago in its final reading. In September, prices for food, entertainment and educational items rose significantly. There hasn’t been such a price increase in Poland in 25 years. However, NBP led by Adam Glapiński, which aims to monitor the level of inflation and the value of the Polish currency, did not raise interest rates in October.

And every subsequent month brings additional bad news. On Monday, the Central Statistics Office will release a flash inflation reading for October. It can reach up to 18 percent. and more. This would be the worst result since December 1996 when inflation hit 18.5%. So what awaits us?

Inflation in October 2022. Economists’ forecasts

It looks like inflation in October could be around 18%. So far, I don’t see any chances of the price index falling to lower levels in the coming months. Instead, he will remain at 18+ until the end of the year – says Monica Kortic, an economist at Pocztowy Bank, in an interview with PAP.

Specialists of Bank Ochrony Środowiska have a similar opinion, although they are of the opinion that the readings will be strongly influenced by pure statistics. In October last year, inflation accelerated foreverThis will influence the readings for this year and the months following 2023.

“Given the very high benchmark period of a year ago since October (a strong increase in inflation since October 2021), the potential for successive month-to-month psychological inflation levels (18% or 19%) is in the short term. We estimate, Average annual inflation will reach around 14.3% this year.” Convince them to publish.

What will happen to prices in the first quarter of 2023?

At the same time, as BOŚ experts point out, we have received new information in recent weeks, such as:

  • Freezing energy prices for annual energy consumption up to 2000 kWh
  • setting the price of coal in the distribution of local governments at 1.5 thousand PLN per ton,
  • Setting the scale for heat increase to 40%.
  • Work on gas law.

According to BOŚ, all this means “a reduction in the risk of a significant growth driver of inflation at the beginning of next year (…) and leading to a smoothing of the course for inflation in the first quarter of 2023”.

Monica Kortic is less sanguine in this regard. – The stakes are high in February, with a very low benchmark this year, when inflation will be around 20%. The first quarter of next year will be very difficult overall in terms of inflation. On the other hand, from the second quarter we should already notice a slight slowdown – indicates.

The inflation rate will rise for most of the next year

BoE economists argue that there is a chance that the inflation peak in the first quarter of 2023 will be around 19%, with the highest result in February due to the low base effect (reducing the rate of VAT on food to zero in February 2022) also mentioned by Monica Kortek.

Then, as of March, we expect a decline in CPI due to the increasing impact of high benchmarks, weak demand and normalization of conditions in global markets. We estimate that inflation will fall below 10% in the second half of next year.– BOŚ Bank Analysts Estimate.

Much depends on politics

Monika Kurtek of Bank Pocztowy believes that a lot in terms of rates depends on the decisions of politicians. Unfortunately, whatever they are going to do, the outlook for our portfolios is not optimistic anyway.

What will happen with inflation in the long run largely depends on Anti-inflation shields. I suppose it will be kept until the end of 2023, but if by January 2024 the government begins to “reverse” the targets – even if it is a gradual “reversal” Inflation will rise again due to tax increases. However, this is a very remote perspective, so it’s hard to predict at the moment – he evaluated it in an interview with PAP.

The winter months lie ahead and while the weather is mild so far and gas storage facilities are full, next year’s winter could be even more challenging. Gas stocks will not necessarily be as large as they are today. This includes and adds that one of the factors that will lead to continued high inflation in the coming year.

In the opinion of the economist, inflation in Poland He may return to the NBP target only in 2025, although – he asserts – this is an optimistic scenario. The central bank’s inflation target is 2.5%. Within one percentage of the up or down tolerance.

– In the optimistic scenario, it can be assumed that inflation will fall to the NBP target in 2025, but I suppose it could be later, for example Because of the complete transformation of energy that has to take place in Europe, and of course also in our country. All plans made before the war are no longer valid. The transformation has to happen faster and at higher costs, which we will all feel, warns Kortek.

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