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Polish Consumers: Cautiously Optimistic Despite Inflation Fears

COMMERCEPolish Consumers: Cautiously Optimistic Despite Inflation Fears

Current moods have been progressively improving since the beginning of the year. Despite still being negative, the current consumer confidence index is gradually approaching the threshold that separates the prevalence of pessimists over optimists. However, in April, the index reached -11.5 points, which was an increase of 0.8 points.

The leading consumer confidence index is lower than its current counterpart, standing at -6.8 points in April. This is also a worse outcome than the previous month, when the index was at -5.2 points.

Such consumer behavior—improved moods now, with a future outlook worsening—is influenced by inflation. Recent readings below 2% have clearly improved moods, although the vast majority still believe that prices are rising at a crazy rate. Thus, neither index has been able to break the 0-point barrier.

Improvements in mood are also being driven by real wage increases. We have started to feel that we can afford more—there is a rise in the index for making significant purchases currently, as well as an increase in the positive assessment of household finances. At the same time, the last two years of living with inflation have raised the economic awareness of Poles, and it seems we understand that prices will soon start rising at a faster pace than in March. Indeed, inflation expectations have “shot up.” In March, just over 7% of respondents in the GUS study expected prices to rise faster over the next 12 months. By April, this percentage had increased to nearly 12.5%.

If moods were to be one of the predictive elements for this year, it could be assumed that the chance for a rebound in consumption is increasing. We are earning more in real terms, we feel we can save more, and consequently, we will likely start spending more.

Mariusz Zielonka, Confederation of Leviathan

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