Inflation in June amounted to 15,6%, and this is not the end of its increases

Inflation in June amounted to 15,6%, and will continue to grow in the coming months. Therefore, on July 7 The Monetary Policy Council will raise interest rates again, though not as much as the central banks in the Czech Republic and Hungary have done. Poles in deposits lost a record 13,4 percent. annually.

Inflation rate clearly up

June brought another strong increase in inflation in Poland. According to preliminary estimates of the Central Statistical Office (GUS), inflation in June amounted to 15,6 percent. against 13,9 percent in May. Although unfavorable data are coming from the economy pointing to the possibility of a recession, the peak of inflation is still ahead of us, so in the coming months inflation will increase even more. Its maximum level may reach 17-18%, although it may be higher in the event of a further increase in fuel prices or a serious crisis related to gas supplies in Europe. Should consumer demand in Poland remain high despite the signals of an impending recession, inflation may also be higher then.

More interest rate hikes?

High inflation means further interest rate increases. On July 7, the MPC may raise rates by 0,5-0,75 pp once again. It is worth noting, however, that in the last two weeks, banks central banks in the region made record increases. In June, rates in the Czech Republic increased by 1,25 pp, and in Hungary by as much as 1,85 pp.

Such high inflation means that Poles in bank deposits suffer record losses. On an annual bank deposit established at the beginning of July 2021 and completed in June 2022, the real loss of its holder was 13,4%.

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.