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Inflation jumps to 4.2% in July as utility bills rise kicks in

Growing utility bills for electricity, gas and water among the reasons for rising inflation, say analysts. Illustrative photo by: (obm) PAP/Grzegorz Michałowski
Growing utility bills for electricity, gas and water among the reasons for rising inflation, say analysts. Illustrative photo by: (obm) PAP/Grzegorz Michałowski
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Electricity, gas and other fuel costs shot up by 10% in July on average compared to last year, driving up Poland’s consumer price index to 4.2% year-on-year, the central statistics office said in a flash estimate on Wednesday.

The rise was, however, lower than the 4.4% consensus forecast of analysts polled by Polish state news agency PAP.

A government price cap on energy was removed on July 1, and economists had expected a knock-on effect on inflation this month.

An 11.8% hike in fuel bills month-on-month translates into an annual rise of 10%. These hikes, compounded by jumps in utilities costs such as water supply and sewage services, were major contributors to inflation, according to analysts.
Annual inflation flash estimate for July 2024
Annual inflation flash estimate for July 2024
“Already in July, some local governments will see large increases – for example, in the eastern Polish city of Białystok these bills will increase by an average of 50%, and in Łódź by almost 35%,” Pekao Bank SA economist Kamil Łuczkowski told PAP. The effect on inflation of water bills will be a rise of around 0.1 percentage points, the economist reckons.

Food prices fell month on month in July, which is a normal occurrence due to seasonal produce arriving on shelves, but analysts at ING bank point out that the drop in prices month-to-month was not as sharp as last year. Overall, food and beverage prices rose by 3.2% annually.
Source: TVP World, Statistics Poland, PAP
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