In the age of the coronavirus pandemic, different countries are struggling to deal with its economic consequences. However, most central banks focused on lowering interest rates. For now, the effect turns out inflation. In the European Union, Poland and Hungary are infamous leaders in this category.
Inflation in the EU
In March 2020 HICP inflation in the European Union fell to 1.2 percent. A month earlier it was at 1.6% In the case of the euro area alone, a decrease from 1.2% was recorded up to 0.7 percent
This means that average price inflation in the euro area, but also the entire EU, is now below the inflation target of the European Central Bank.
Sounds good, but the devil is in the details. Unfortunately, the new study also showed great variation within the EU. Prices are stable in the south of the continent (Spain, Italy, Portugal, Cyprus) – there inflation was only 0.1 percent. yoy. A slight increase in prices was recorded in France (0.8%) and Germany (1.3%). This is important because they are the two strongest economies in the EU.
Poland has a problem with high inflation
However, Central Europe has the biggest problems. A price jump of 3.6% was registered in the Czech Republic. Compared to other countries, this is a lot. However, the worst situation is in Poland and Hungary. Eurostat calculated that the increase in consumer goods basket prices increased to 3.9 percent. yoy.
Let us remember that for several years our country has been particularly generous in social policy. He was the first to warn that it would end in high inflation. Krzysztof Piech (also known from the cryptocurrency market and blockchaina). Unfortunately, no one listened to him.
Other experts today say that the Monetary Policy Council should increase interest rates even earlier – in an era of prosperity. This was not done, and now – during the crisis – it has been further reduced.
We have already written here that our country is leading in terms of price increases compared to other EU countries. Inflation in Poland will probably continue to rise. Today, there is little indication that this trend should reverse.
Get notifications about important new market events.