Inflation in November was 6,5% and is falling more and more slowly

Inflation dropped slightly in November - to 6,5%. The decline in inflation is slowing down and in the following months, inflation may increase. At the same time, the real value of social benefits is constantly decreasing. 500 Plus is today worth only PLN 334, and its increase since the new year is a real increase of only 7%.

The decline in inflation is slowing down

According to the preliminary reading GUS, inflation in November was 6,5 percent. This means that inflation dropped from 6,6%. y/y in October. As expected, the decline in inflation has slowed down significantly, so in the following months, inflation should stabilize at the current level. We may even see it increase at the beginning of next year.

In November, fuel prices increased significantly (by as much as 8,8% compared to October). This is the result of prices becoming more realistic after the parliamentary elections, as well as increased geopolitical tensions in the Middle East. Food prices are also constantly increasing - in the last month - by 0,8%. However, energy prices decreased slightly (by 0,1%). This was influenced by, among others, retroactive reduction of energy prices for some consumers.

Polish investors are less and less afraid of inflation

According to the Puls Inwestora Indywidualny study eToro, 32 percent Polish individual investors are most concerned about the condition of the Polish economy in the next 3 months. The second greatest risk is the level of interest rates (15 percent of responses), and only the third one is inflation, perceived as the greatest threat by 11 percent. investors. It is also worth noting the recent strong declines in inflation in euro zone countries. In Germany, inflation dropped to 3,2% in November (from 3,8% in October). Similarly, in Spain, inflation was 3,2%. (3,5% in October), although the market expected it to increase.

Inflation also affects the real value of social benefits. Today, the 500 Plus benefit is worth only PLN 334 at the prices from the beginning of the program, i.e. April 2016. From the new year, its amount will change from PLN 500 to PLN 800. Although the nominal benefit increases by 60 percent, the increase will only amount to 7 percent, because restoring the real value of the benefit from 2016 would currently require payment of PLN 748.

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.