Inflation in Poland in June 2022 breaks new records! And this year’s peak of price growth is still ahead of us

On Friday, the Central Statistical Office published a quick reading of consumer inflation in June. As expected, the CPI recorded another increase, and the reading itself is in line with the forecasts of most analysts. However, it should be remembered that this year’s inflation peak is most likely still ahead of us.

Prices are going up all the time

According to the estimates of the Central Statistical Office , the  CPI inflation index in June was 15.6% on an annual basis and 1.5% compared to May . This is the highest annual inflation reading since March 1997.

The prices of food and non-alcoholic beverages increased in June by 14.1% year on year and by 0.7% compared to the previous month. Energy prices increased by 35.3% in annual terms and 3.0% compared to April, while fuel prices for private means of transport increased by 46.7% in annual terms and by 9.4% compared to the previous month. In line with analysts’ expectations, the faster and faster growing fuel prices mainly brought consumer inflation to the highest level in 25 years.

Core inflation (Core CPI), ie excluding food and energy prices, amounted to approx. 9.2% on an annual basis.

Trying to look for any positives, you can pay attention to the weakening dynamics of price growth on a monthly basis – this is the third consecutive month in which the month-on-month CPI index has been decreasing: in March the monthly price increase amounted to 3.3% , which was the highest inflation reading in a monthly perspective since the beginning of 1996. In April, the monthly inflation dynamics amounted to 2% , and the May data indicated a decline to 1.7% . According to estimates for June, the monthly inflation dynamics dropped to 1.5 percent, although this is a poor consolation, as the following months will almost certainly bring further increases in the CPI index in the annual perspective.

The quick inflation reading for June  coincided with most analysts’ forecasts – economists from PKO BP hit the data of the Central Statistical Office perfectly, Credit Agricole analysts expected a reading of 15.7%, and Santander Bank forecasted a price increase in June at 15.5 %.

It is worth recalling that the GUS quick reading is an estimate and does not provide insight into individual categories of products and services. A scenario is also possible, in which today’s reading will be revised upwards, which was the case in April, when the final index of increase in the prices of consumer goods and services was 12.4%, from the preliminary 12.3%. We will have to wait two more weeks for the final data for June, including the reading for the first half of 2022: until Friday, June 15.

Michael Cooper

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