According to the latest figures of the Central Statistical Office (GUS), in December 2024 inflation in Poland was 4.8% year-on-year, and prices increased by 0.2% compared to November. The overall inflation rate for 2024 reached an average of 3.7%. These data, though disturbing, are better than the predictions of experts who expected higher readings, at 5%.
How did inflation affect the economy in December 2024?
The inflation rate in December 2024 remains clearly above the inflation mark of the National Bank of Poland (NBP), which is 2.5% with an acceptable deviation of 1 percent point. This situation may affect the decisions of the Monetary Policy Council (Money Policy Council) regarding further changes in interest rates. According to CSO data, the main drivers of price increases were:
- Food and non-alcoholic beverages – Their prices increased by 4.8% compared to December 2023 and by 0.2% per month. Over the full 2024 the average price increase of this category was 3.3%.
- Energy carriers – The increase in prices by 12% a year, at unchangeable monthly prices, makes energy stay a key component affecting inflation. Over the year, the average price increase was 4.3%.
- Private transport fuels – They were 3.9% cheaper than in December 2023, which somewhat alleviated inflationary pressure. On a yearly basis, fuel prices fell by 2.4%.
Year 2024: Inflation below expectations but inactive high
Throughout the year, inflation in Poland dropped compared to erstwhile years. The index of consumer goods and services (CPI) averaged 103.7, which means a price increase of 3.7%. Although this is lower than in erstwhile years, it remains above the NBP inflation target.
Experts stress that the way to price stableness will be long. The following factors will be crucial in the coming months:
- Prices of natural materials on global markets – The increase in energy and food prices on the planet marketplace straight affects the situation in Poland.
- Labour market – Low unemployment and rising wages can sustain inflationary pressure.
- Monetary policy – The RPP decisions on interest rates will have a key impact on the direction of inflation.
Conclusions and future prospects
The December inflation rate in Poland shows that despite a marked improvement in the situation, the problem of advanced inflation remains valid. Price stabilisation will require appropriate political and economical decisions and external factors.
Further developments in inflation will depend on global and national economical developments, which makes monitoring of these indicators highly crucial for public finance planning, the private sector and households.
Inflation will besides exceed the inflation mark for the greater part of the second half of the year. The NBP macroeconomic survey shows that inflation will increase again in the 4th quarter. https://t.co/HuzZXlcjve. in view of the cooling of energy prices. The current consensus indicates a level close to... pic.twitter.com/fw7N5MyKV3
— Polish economical Institute (@PIE_NET_PL) January 3, 2025
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