FOR Communications

The Central Statistical Office's flash estimate for September, pointing to an inflation rate of 8.2%, offers little reason for optimism – inflation remains over three times above the tar-get. It's important to remember that the PiS government allocated tens of billions of zlotys this year to "freeze" prices. Without these highly expensive manipulations, made to mask inflation during the election year, prices would still be rising at a double-digit rate – we es-timate that in September the price level would have surged by as much as 17.9% YoY. Just because the government "freezes" prices before elections doesn't mean that post-election inflation won't sharply increase – no country can afford to perpetually maintain suppressed prices, and next year Poland will have one of the highest public finance deficits in the Euro-pean Union.

The data published by Eurostat reveals an alarming situation in which the Polish economy is now. In comparison to other economies in the European Union, it appears to be very weak in terms of economic growth and, simultaneously, particularly affected by inflation.

Elections are approaching, and the banners on the NBP headquarters are examples of the polit-ical involvement of this institution and the misuse of public resources for election campaign purposes. In May of this year, the Polish central bank published an Opinion of the NBP President re-garding the electoral proposals of PiS and PO. This document clearly shows the political preferences of Adam Glapiński, even though, according to the Constitution, the president of the National Bank of Poland should not engage in politics.

The Council of Ministers has decided to raise the minimum wage to 4242 zł gross from January 2024, and to 4300 zł from July. In relation to the average or median salary, the Polish minimum wage is already one of the highest in Europe. Despite this, it will increase again next year by more than one fifth.

The increasing demand for labor and the ongoing process of society’s aging mean that Polish entrepreneurs are more willing to employ foreigners. The Polish authorities are keen to bring in economic immigrants. It is therefore absurd how the Polish government behaves: while they themselves approve the admission of a multitude of workers from outside of the EU, they enter another pointless dispute with Brussels, rejecting the proposal of a solidarity mechanism in the field of migration.

With the votes of the ruling coalition, the Parliament passed an amendment to the Penal Code and several other laws. The law, which amends the National Defense Act, reintroduces a ban on photographing - very broadly defined - objects of strategic importance. Such strategic objects can include, for example, bridges, railway stations, hospitals, GSM transmitters, or even certain universities. The list of objects of strategic importance for national security and critical infrastructure that may be subject to a photography ban is not publicly available. Citizens will not be able to determine whether a specific object falls under this ban.

Sejm (Polish lower house of parliament) has passed a law prohibiting the sale of energy drinks to individuals under the age of 18. New regulations also ban the sale of such beverages in educational institutions and vending machines. Restrictions are to come into effect on January 1, 2024.

Why are prices rising? Because someone raises them. Why do they raise them? Because they are greedy. And who sets the prices? Entrepreneurs. This is the brief presentation of the “greed-based” theory of inflation, which has been gaining popularity among hostile to business, left-leaning econo-mists and journalists. A well-expressed advocate of this theory is also the president of the National Bank of Poland, who uses the argument that recent price increases are due to greed, backs it up by a personal study of allegedly inflated prices of butter by retail chains.

The amendment to the Act on export insurance, as a government bill, should have included an assess-ment of regulation’s impact and undergone public consultations, which cannot be said of the amend-ments introduced by the Sejm, which should preferably be closely related to the original bill. In this case, we are dealing with far-reaching legal changes in an entirely different area than the one ad-dressed in the amendment. This form of legislation, not used for the first time by the ruling party’s politicians, is unacceptable in a developed democracy.

According to the constitution, the National Bank of Poland is responsible for the value of the Polish currency, and according to the law, its primary objective is to maintain a stable price level. However, during Adam Glapiński's presidency (since June 2016), the accumulated inflation until May 2023 reached 47.6%, which means an average increase of the price level of about 5.7% per annum, while the inflation target is 2.5% with a deviation range of ±1 percentage point. In February this year, inflation reached 18.4% y/y, marking the highest rate in over 26 years.