Poland’s expected inflation index continues upwards

Poland's expected inflation index rose 2 pct in June and is at its highest in years, the Office for Investment and Economic Cycles (BIEC) noted on Tuesday.

BIEC pointed out that the index has been rising since July 2020, with 2-pct monthly leaps witnessed over the past four months. The office added that at the moment inflation fears have made 23 pct more businesses plan price hikes rather than cuts over the coming months, the highest percentage since autumn 2007.

"Inflation expectations on the consumer market and in industries are at a very high level, unseen in years," BIEC wrote. The office said the high inflation forecasts were the effect of rising raw material prices, a consumption upswing caused by recent social benefit hikes and the easing of pandemic restrictions, and poor coordination between Poland's economic and monetary policies.

According to BIEC, around 90 pct of Polish households expect price hikes in the near future, around 30 pct expect inflation to continue rising, and around 44 pct believe prices will continue to rise at the present pace.

According to the Central Statistical Office (GUS), Poland's inflation rate in May rose 4.7 percent year on year. The office’s earlier forecasts had estimated May's year-on-year inflation rise at 4.8 pct.