The trend of food price growth may accelerate due to the risk of drought in Poland, state economic researcher the Polish Economic Institute (PIE) said in its recent analysis.
For almost a year, food prices in Poland have been rising faster than in previous years, and extreme weather conditions may aggravate this phenomenon, PIE said.
Experts citing data from the Central Statistical Office (GUS) indicated that since July 2019, the price increase in the food and non-alcoholic beverages category has exceeded 6 pct annually, whereas in the last ten years, the average annual increase in food prices has been about 2.5 percent.
They added that food and non-alcoholic beverages are the most important element of GUS’s inflation basket, accounting for one fourth of its total value.
“The COVID-19 epidemic changes the structure of household consumption and makes food price increases more severe,” PIE also said.
“Due to economic restrictions caused by coronavirus, categories such as recreation, culture, restaurants and hotels, responsible for 13 pct of the inflation basket, have almost completely disappeared from the list of consumer spending,” PIE calculated.
“Spending on transport, clothing and home furnishings also decreased significantly (about 20 pct of the entire basket). For this reason, the share of other categories, including food, is currently greater than in ‘normal’ times,” the experts concluded.