Poland: Inflation closes 2019 at over seven-year high
January 7, 2020
Consumer prices surged 0.8% over the previous month in December, following November’s 0.1% uptick, according to provisional data released by the Poland’s Statistical Institute (GUS). Notably higher prices for food and non-alcoholic beverages and fuels drove the increase. Core consumer prices in November (the latest month for which data is available) were flat in month-on-month terms, down from October’s 0.3% rise.
Inflation jumped from 2.6% in November to 3.4% in December, the fastest increase since October 2012, and thus moved landed just below the upper bound of the Central Bank’s target range of 2.5% plus or minus 1.0 percentage point. For its part, core inflation came in at 2.6% in November (the latest month for which data is available), above October’s 2.4%, printing the strongest increase since April 2012.
All told, annual average inflation edged up from November’s 2.1% to 2.3% in November, the highest reading since May 2013.
Commenting on the release, Rafal Benecki and Jakub Rybacki, Poland chief economist and economist at ING respectively, stated:
“We expect the rapid increase to have been caused by goods and services, ahead of the January 2020 15.6% rise in minimum wage, the highest ever. Importantly, this hike will not only affect those earning the minimum wage but also some currently paid above the minimum wage. Employers will be forced to adjust a substantial part of their pay structure, as this highest ever hike in minimum wage (15.6% in Jan-20, followed by similar hikes in 2021 and 2022) will change wage dynamics among low income earners”.