Inflation success, or are we really happy about it?

Recently, we have heard a lot about the inflation success in Poland.

“Inflation in our country has fallen by more than half!”

That sounds nice when we're coming off of almost 20% year-over-year price increases. Much credit goes to the government for mitigating the effects of energy shocks on households, as well as to the fuel giant, which has offered such prices that it cannot keep up with refilling tanks at gas stations.

Inflation in Poland it fell in September by -0,4% m/m and amounted to 8,2% per year. In October it may be around 7%, and further, in the spring of 2024, it may be heading towards 5%. It will probably rebound later, but there is no talk about it for now, because the base effect from this year will come into play, when prices according to the CPI index have been almost stagnant since April. Prices will probably increase in October m/m.

However, should we be happy if we look objectively at the entire fight against inflation in Poland? Are we really that successful compared to other countries? Let's check the numbers.

As we well know, the alarming problem of inflation in Poland began already in 2019, so we will take into account price changes in the economy, based on the CPI index, for Poland, Hungary, the euro zone, the Czech Republic and the recently fashionable Baltic countries that do not have the opportunity to fight with inflation such as in Poland, because they have the euro and are subject to politics European Central Bank.

According to data from statistical offices, the increase in the prices of the basket of goods and services in Poland has amounted to over 2019% since 41. At that time in Hungary the price increase was over 50%. And this is where the good news about inflation success ends. Yes, only in Hungary has inflation been higher since the fight against it began. Lithuania, Latvia, Estonia, the Czech Republic and the entire euro zone together have lower inflation than the inflation in Poland at that time. Romania also recorded lower price growth since 2019.

So, to make sure we rejoice, where to find the success of winning against inflation by NBP, when it is almost the largest in the region, outside Hungary? Everyone must decide for themselves whether there is anything to be happy about.