Poland says consumer prices rose 7.7% in the past year, the highest inflation rate in 20 years and a bigger jump than economists predicted
WARSAW, Poland – Poland said on Tuesday that consumer prices rose 7.7% over the past year, proof that inflation is accelerating even faster than expected in the world’s largest economy. Central Europe of the European Union.
The November number is the highest inflation rate in 20 years and marks a bigger jump than economists had predicted. Last month it hit 6.8% per year, according to the statistics bureau.
The rise in prices marks one of the most serious setbacks for an economy that has grown rapidly since the fall of communism three decades ago and whose modernization has been aided by EU membership.
Polish Prime Minister Mateusz Morawiecki announced on Tuesday that his government had approved measures to cushion the shock of inflation, including fuel tax cuts and subsidies aimed at helping millions of households.
They are intended “to protect Polish families, to protect budgets and to reduce the costs associated with rising prices,” he said.
Morawiecki blamed the rise in inflation in part on soaring costs for Russian gas imports. He also criticized the EU’s climate agenda and its efforts to cut greenhouse gases, with the cost of carbon emissions reaching record highs recently.
The rise in prices in Poland was reported as the annual inflation rate in the 19 countries that use the euro reached 4.9% in November, the highest since records began in 1997, a announced Tuesday the statistical agency of the European Union.
Eurozone consumer prices are driven by a huge surge in energy costs, just as Poland’s increases are fueled by gasoline prices. They have climbed 36.6% since last year, exacerbated by the weakening of the country’s currency, the zloty. The lower zloty means that imports, including oil, which are priced in US dollars, become more expensive for Polish consumers.
The cost of heating jumped 13.4%, while prices for food and non-alcoholic beverages rose 6.4%.
While rising prices are straining households and businesses around the world, they are hitting Central European countries, particularly Poland and Hungary, particularly hard.
Inflation is one of the effects of measures taken by governments to avert economic catastrophe when the coronavirus pandemic caused lockdowns last year. Many countries, including Poland, have injected money to keep businesses afloat, while central banks have kept interest rates at historically low levels to stimulate economic activity.
At a press conference, Morawiecki recalled that his government had injected 200 billion zlotys ($ 50 billion) into the economy earlier in the pandemic so that COVID-19 “does not bankrupt hundreds of people. thousands of Polish entrepreneurs and the liquidation of millions of jobs. . “
By this measure, the effort was largely crowned with success. The Polish economy grew 5.3% between July and September and is expected to continue growing at about this rate next year. Unemployment is low.
But as economic life has started to return to pre-pandemic normal, increased demand has tested the ability of suppliers to keep pace. Shortages of raw materials are one of the reasons for the surge in prices.