Flash estimate: inflation in May at 13.9% - level unseen since 1998

Consumer prices according to the flash estimate in May 2022, compared with the corresponding month of the previous year, increased by 13.9% (price index 113.9), and as related to the previous month increased by 1.7% (price index 101.7) - Statistics Poland said in a flash estimate on Tuesday.

This is the highest prices increase since March 1998, when inflation also jumped to 13.9%.

The Polish Economic Insitute (PIE) said on Twitter that although prices of food and fuels increased the most, prices of the majority of all goods and services were also going up quickly. "Core inflation increased up to 8.3%. We expect the inflation to peak in August - it should be approx. 14%" - the institute wrote.

The PEI also forecasts that food prices during the summer may go up even by 20-21%. "This is an effect of global production problems - limited supplies from the East, shortage of fertilisers, and drought. Further countries limit food exports - recently such decisions have been taken by Indonesia and India," we read.

In an interview for TVN24, economist Małgorzata Starczewska-Krzysztoszek pointed out various government and central bank decisions which affect the scale of inflation.

"We have two tools to fight inflation. One is the policy of the Monetary Policy Council, National Bank of Poland - the monetary policy, which is carried out by increasing interest rates. The second element is the policy pursued by the government - the fiscal policy. On the one hand we have interest rates that have been actually increased by the National Bank of Poland since October of last year. On the other hand, the government has been acting in a completely opposite direction - they have been putting more money in our pockets. The "thirteen" and "fourteen" pensions, tax changes," she explained.

Starczewska-Krzysztoszek added that food prices were very unlikely to decrease in the coming months.