Inflation turned 500 plus into 420 plus

The 500 plus benefit is now worth less than PLN 420 at the prices from April 2016, i.e. the starting point of this program. We forecast that due to high inflation in the fall of next year, 500 plus will turn into 400 plus. Today, for PLN 500, you can buy 83 liters of gasoline from the program, while at the beginning it was 116 liters.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

500 plus will soon become 400 plus

Inflation eats up not only savings, but also reduces the value of benefits that do not have an indexation mechanism. The 500 plus program was launched on April 1, 2016 and was the implementation of one of the main election promises of the PIS. However, from the beginning, the program assumed a fixed amount of the benefit, which was not to be indexed. For this reason, the real value of the benefit is decreasing month by month. However, the recent significant rise in inflation (to 7,7% in November) caused its value to decline more strongly. In December 2021, the real value of PLN 500 paid under the program is only PLN 419 at prices from April 2016. This is because the cumulative inflation in the period from April 1, 2016 to the end of November 2021 was almost 20%.

Depending on the further inflation growth scenario, the value of the 500 plus benefit will fall below PLN 400 (at prices from April 2016) between October and December 2022.

Official CPI inflation given by the Central Statistical Office of Poland is an average basket of consumer goods. However, there are products that have increased more than inflation. For example, 95 gasoline cost PLN 2016 / l at gas stations in April 4,30, currently the price is PLN 6 / l (39 percent more). For the 500 plus benefit paid in April 2016, it was possible to buy 116 liters of such gasoline, while today it is only 83 liters.

How much is the benefit from the 500 plus program really worth (in prices as of 1.04.2016 April XNUMX)? Source: GUS, eToro's own calculations