This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Such price spikes naturally raise concerns about higher inflation across the economy. This trend is confirmed by the latest consumer sentiment survey conducted by Statistics Poland (GUS). When asked about expected changes in consumer prices over the next 12 months, 18 percent of respondents anticipated a faster increase. Just a month ago, that figure stood at only 6 percent. This is a high share compared with recent years. Similar levels were recorded at the start of the pandemic in 2020 and following the outbreak of war in Ukraine in 2022.
Interactive chart Can these results be taken as a reliable forecast of inflation? Not entirely. In the chart above, I show how these expectations (shifted forward by six months) compared with actual inflation. Generally, during the inflation shock of 2022–2023, they aligned with subsequent price increases, but earlier, in 2019 or at the start of the pandemic, this was not the case.
Higher inflation expectations among consumers, however, do influence price dynamics. First, they increase public tolerance for price hikes. Second, they encourage higher wage demands. And third, some companies may be prompted to raise prices preemptively. The precise scale of these effects, of course, depends on many other factors, as does the ultimate impact on overall price growth in the economy. For now, even in pessimistic scenarios, inflation appears to be under control – but if inflation expectations rise, so too will the inflationary pressure.