The Future Inflation Index (WPI), which forecasts several months in advance the direction of changes in the prices of consumer goods and services in February 2023, fell by 1.2 % compared to the previous month’s quotations, reports the Bureau of Investment and Economic Cycles (BIEC).

This was the seventh consecutive decline in its figure. While in the autumn of last year, the main factors reducing inflationary pressure were falls in the prices of basic raw materials on global markets, in recent months, the strongest impact has been exerted by increasingly lower inflation expectations, expressed both by consumers and by production companies.

BIEC reminds that the drop in the index only forecasts a reduction in the current rate of price growth in the perspective of the coming months and it does not mean a decrease. The cumulative price growth since the maximum deviation from the inflation target, which took place in April 2021, and exceeded 23% at the end of last year. This means a loss of nearly one-quarter of the purchasing power of the average Polish citizen in that time, which contributed to a decrease in demand and, consequently, slower economic growth.

Most optimism regarding the anticipated price increase in the coming months is shown by representatives of households. For several months now, respondents expecting prices to rise faster than before have been systematically decreasing in favour of the group expecting slower price growth. 

As recently as last September, around 29% of consumers surveyed expected prices to rise faster and only 18% believed that prices would rise more slowly. Now, the percentage of respondents expecting slower price growth than before has jumped to nearly 31%, while the percentage of those expecting faster price growth than before has shrunk to less than 16%. 

Adrian Andrzejewski