tstart: 1632855922.0989
Adam Glapiński economy Inflation Poland prices News

Poland has the highest inflation rate in the EU: report

editor: REMIX NEWS
author: Łukasz Wilkowicz

Poland has the highest inflation growth in the European Union, according to an Eurostat report which indicates that the retail price increases in Poland in 2020 reached 3.4 percent.

Second was Hungary, where prices grew by 2.8 percent by the end of the previous year. Close to half of EU states experienced deflation, which means that goods and services purchased in December 2020 were cheaper than in 2019.

Eurostat data differs from state data due to methodology. According to Poland’s internal data, inflation in December 2020 reached only 2.4 percent. This data, however, also permits comparisons with particular countries.

Where did Poland experience spectacular price increases in 2020? Mainly in garbage disposal where price shot up more than 50 percent in 2020 compared to 2019. In comparison with 2015, garbage disposal is twice as expensive and compared to 2005 — close to the period when Poland joined the EU — it is six times more expensive. This price surge is mainly due to the Poland embracing recycling. 

The head of the National Bank of Poland, Adam Glapiński, believes that the speed of implementation of garbage disposal is scandalous and stated that the issue is also associated with the fact that the largest waste disposal companies are owned by foreign capital.

The price of financial services in Poland also grew by close to 50 percent year-on-year. Previously, these services could be free in many instances because loan institutions made up for banking fees through a higher interest margin. The decreases in interest rates in 2020 led to these margins being lowered. Banks, in search for profits, had to modify their fees for their services.

Services such as hair-dressers, cosmeticians, elderly care, and house painters also saw some of the fastest price increases. Some of these increases were due to the additional sanitary restrictions imposed due to the pandemic.

The “goods” which have risen in price the most, however, turned out to be pets. Telephone device prices also grew by close to a fifth in 2020, another effect of the pandemic and the need to purchase remote communication devices.

Despite inflation data, there are several categories in which prices decreased in 2020.

While the overall price of food went up slightly, in the case of many particular food products, costs were actually decreasing. Potatoes cheapened the most in 2020 — their price in December was lower by a third than in 2019. Meat prices decreased by a few to several percentage points depending on the type of meat.

Transport also became cheaper in 2020 both for public transportation and for gas for private vehicles. This was the result of restrictions on movement and a ban on flights, as well as the drop in price of gas on global markets.