“In Central European countries, including Poland, we can observe unsustainable post-pandemic recovery, in which production capacities are used to the limit, and companies – both service and industrial – can raise prices without fear of losing customers” – write Maciej Bukowski and Krzysztof Bocian, Authors of the “Inflationomics. Inflation during times of crisis” report.
What caused inflation in Poland? Is inflation so high right now because of the war in Ukraine?
The main source of above-average inflation in Poland is the combination of an expansionary fiscal and monetary policy and other public policy decisions taken when the economy had gradually started to show signs of overheating, both before, during and after the COVID-19 pandemic.
Contrary to other EU countries, the external shocks affecting the energy market, and indirectly also the food market, can only be attributed to approx. 20-30% of the inflation observed in Poland. In the medium term, they should expire on their own, but due to the risk of prolonged hostilities in Ukraine, it may turn out that the next several months will be energetically difficult.
The key to overcoming these difficulties, however, will not be measures aimed at high energy costs per se (anti-inflation shields should focus on poorer households and the energy-intensive industry), but aimed at real strengthening of energy independence in a manner consistent with European initiatives: Fit for 55 and REPowerEU.
