Polish industrial production grew by 7.6% YoY, thus decelerating rapidly in recent months. The economy and the labor market must adjust to a new energy shock.
In Poland, June CPI rose to 15.5% YoY, where energy carriers were 35.1% more expensive than a year earlier, with fuels +46.7%.
Upward pressure from commodity prices continues and symptoms of a marked economic slowdown are visible in the construction industry.
In Poland, second-round effects thrive in an environment of expansionary fiscal policy, buoyant wages growth, and consumption boom.
The Bank of Poland takes its main rate to 4.5%, projecting 6.5% this year and 7.5% in 2023. Meanwhile, companies are passing higher costs on to CPI.
As coal has the biggest potential to lower gas demand, Poland wants to use it to produce electricity after 2049 to bolster its energy security.
The conflict in Ukraine has created another excuse to blame inflation on oil and natural gas, rather than the increase in the money supply.
Household consumption will keep sustaining the Polish economic growth o\in 2022, and high producer prices will be passed on to final consumers.
NATO’s Achilles heel in the Russia-Ukraine war. Beware of Kaliningrad, Russia outside Russia, a crossing point between Europe and the three Baltic countries.
GDP and consumption booms continue, but price-wage spiral too, as consequence of expansionary economic policy in recent years.