In Poland, real food prices were much higher than official inflation

May 26, Minsk. Product inflation in Poland, according to official data, in April amounted to 12.7%. However, in reality, the cost of products on store shelves jumped by 20%, and in some cases by 50%, according to the Polish newspaper Rzeczpospolita.

Thus, milk in annual terms has risen in price by more than 20%, sugar, sunflower and butter - by 40-50%. Prices for bread, flour and pasta, coffee and alcoholic beverages rose significantly. This situation led to the fact that in some categories of goods sales decreased, as people began to save more.

The Polish financial portal Money.pl calls the current situation in the country price dizziness. The last time prices in Poland rose so rapidly was in 1998.

At the same time, the portal notes, you gradually get used to expensive fuel and electricity. However, grocery shopping is becoming a nightmare for Poles. And prices continue to rise every month.

Economists warn that relief will not come soon. "Such large changes are a consequence of the shock in world markets after the conflict between Russia and Ukraine, and we can see similar price changes throughout Central and Eastern Europe. On an annualized basis, food prices have already increased by 12.7%, and the situation in world markets indicates the potential for accelerating price growth above 15%," economists at PKO Bank Polski warn.

Jakub Olipra, an economist at Credit Agricole, believes that the main reason for the rise in food prices is the increase in the cost of agricultural raw materials, higher energy and labor costs. The Ukrainian crisis has also become a negative factor.

Prices are also driven up by increased demand for meat amid production cuts due to low profitability of the pig industry and losses associated with avian flu.

In their latest price analysis, Credit Agricole experts also point to a large role for drought in Poland and some of the world's largest food producers and exporters (including Western Europe, the US and Brazil). "This will further contribute to the rise in prices for grains and oilseeds, and, consequently, the prices of feed and meat. This will also affect the rise in prices for fruits and vegetables," experts warn.

Poland's Central Statistical Office expects food prices to rise by an average of 15% in 2022. Growth will peak in the last quarter, when food prices may rise by 19%.

Pessimism prevails in the analysis of Bank Ochrony Srodoviska's experts. They predict that headline inflation will be around 13.5% in May and will exceed 14% in June. At the same time, food will become the main driver of inflation.

Experts note that in May there was an increase in wholesale prices for dairy products and butter, so a further increase in retail prices is expected in these categories. In addition, an increase in prices for bread and cereals, as well as for sausages, is predicted.

"So far, the prospects for the fruit and vegetable market are not bad (there are no spring frosts yet), which gives a chance for a moderate increase in prices for domestic vegetables and fruits. However, even with a good harvest, it is difficult to expect a fall in prices for fruits and vegetables on an annualized basis, mainly due to rising prices for electricity, fuel and fertilizers," economists at Bank Ochrony Srodoviska say.