Polish Inflation Rises to 3.2%; Food Price Impact Debated Amid Global Tensions

Poland's inflation rate has continued its upward trend, reaching 3.2% year-on-year in April, a figure that has surprised economists who anticipated a slowdown. This marks the second consecutive month of rising inflation, following a 3% increase in March. The pertinent question now is whether this inflationary pressure will significantly impact food prices, a concern amplified by recent global geopolitical events. Many recall the dramatic food price surges of up to 30% and even 80% in some instances during the energy crisis following Russia's invasion of Ukraine in 2022.

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W kwietniu koszyk "żywność, napoje bezalkoholowe" był droższy o niespełna 2 proc. w relacji rocznej. Uważam, że sytuacja na świecie miała dotychczas niewielki wpływ na ceny żywności – mówi Grzegorz Rykaczewski, ekonomista Pekao.

Economist Grzegorz Rykaczewski from Pekao Bank offers a nuanced perspective, suggesting that the current global conflicts, particularly those in the Middle East, may not have the same dramatic effect on food prices as the war in Ukraine did. He explains that the 2022 crisis involved two major global exporters of agricultural commodities – grains and oilseeds – leading to widespread supply chain disruptions and immense uncertainty. This directly fueled the sharp rise in food prices.

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Faktycznie była obawa, że ten konflikt, który wybuchł na Bliskim Schodzie, mocniej przełoży się na wzrost cen żywności. Natomiast to też nie każda wojna działa tak samo – mówi Grzegorz Rykaczewski, ekonomista Banku Pekao i analityk sektora rolno-spożywczego.

In contrast, the current situation in the Middle East primarily involves countries that are importers of food, although they are significant producers of fertilizers. Rykaczewski points out that while there is an upward pressure on costs due to rising energy and fertilizer prices, the demand side is different. The conflicts in the Middle East could potentially weaken demand in the region, which is a major consumer of food products. This could exert a dampening effect on prices, counteracting some of the cost-push inflation. However, Rykaczewski cautions that the risk of inflation remains, particularly due to increasing fertilizer costs, and this impact could grow if the conflict prolongs. For now, the year-on-year increase in the 'food, non-alcoholic beverages' basket remains modest at just under 2%, indicating that global events have had a limited, cost-driven impact on Polish food prices to date.

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Dlatego mamy tę stronę kosztową, która mogłaby pompować tę inflację żywności, ale nie mamy tej strony popytowej. Tym to się różni od tego konfliktu sprzed kilku lat u nas na wschodzie.