Poles on deposits still lose about 10 percent. annually

On an average annual bank deposit, completed in April 2023, its holder actually lost 9,71 percent. This is still less than the losses of holders of the same deposits last year, when the maximum loss was even 14,5 percent. Inflation will remain high for a long time, which, given the lower level of interest rates, means further losses for holders of bank deposits.

The NBP inflation target will be reached as soon as possible in 2025.

In April, inflation was 14,7 percent. y/y, i.e. almost 2 pp below the peak from February this year, which was 18,4 percent. y/y The downward trend in inflation is clear, but it is virtually certain that it will meet the inflation target NBP (amounting to 2,5% y/y) will not be reached until 2025 or later. High inflation will continue to be a problem for the economy and investors. This is indicated by readings of core inflation, which in April amounted to 12,2 percent. (down only slightly from 12,3 percent in March). Core inflation indicates that inflation is becoming more and more deeply rooted in the economy, which will make it much more difficult to fight it in the coming months. In connection with the elections, there will be increased budget spending, stimulating internal demand and related to the implementation of election promises, such as e.g. change of the 500 Plus benefit to 800 Plus.

High inflation (14,7 percent) with much lower interest rates (6,75 percent) means that Poles lose a lot on bank deposits. On the annual bank deposit, opened at the beginning of May 2022 and completed in April 2023, the real loss of its holder amounted to 9,71%. This is due to the fact that according to NBP, the average interest rate on deposits opened in May 2022 for a period of 6 to 12 months was 3,6 percent. Even choosing the best deposits on the market at that time - with an interest rate of 5,5 percent. We lost 8%.

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Up to 14,5% real loss on deposits

Despite almost 10 percent losses on deposits ending in April 2023, losses of holders of 12-month bank deposits ending in subsequent months are successively decreasing. This is due to the decrease in inflation, as well as the increase in interest rates and the improvement in interest rates on deposits in the first half of 2022. A record loss was caused by 12-month deposits opened in October 2021 and ending in September 2022, which brought their holders as much as 14,51 percent. losses. Since then, losses on deposits have been gradually decreasing, although they still remain high. Even in 2020, the real loss of the holder of annual deposits was 1-2 percent. annually.

Inflation is currently a serious cause of concern for investors, both in Poland and around the world. According to the study eToro Individual Investor Pulse, in which 6000 individual investors in 12 countries were surveyed, shows that of all nations, Poles are the most afraid of inflation (in the perspective of the next 12 months). In the first quarter of 2023, rising inflation is indicated by 26% of respondents as the most important cause for concern. surveyed investors from Poland, while in all surveyed countries, inflation raises concerns of 20 percent. surveyed.

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.