Inflation has climbed to 16% in Poland according to official data. This is the highest percentage in the last 25 years. A walk to the market gives an even more alarming picture: Vegetables, fruit, sausages, yogurts, packaged soups and other basic food items have become out of reach for low-wage earners. Agnieszka, owner of a grocery store in Warsaw, finds this too. As he says, “the official figures speak of 16%, but when I see the food here I think inflation has gone to 100%. The prices of dairy products, flour, sugar, oil are particularly high.”
Agnieszka has one of countless Polish “Delikatesy”. It is not about our well-known “Delikatessen”, about luxury goods. In Poland this name has been established for all the neighborhood grocers and grocers, small businesses that once sprouted up in every neighborhood. Today a small business cannot compete with discount supermarket chains. And yet, there are customers who will always look for the neighborhood store. “One lady who comes every now and then is Halinka,” says Agnieszka. “She’s retired, lost her husband and lives on very little money. She’ll always owe something at the end of the month…”
“Lock” for neighborhood shops
Delikatesy has always been the easy solution for small, everyday purchases. Many of these businesses are closing down as they can’t keep up with rising energy costs, rents, wholesale prices. More than 3,500 “lockouts” are recorded in the first half of the year. In the center of Warsaw there are many who express their concern about the coming winter. “I’m scared,” says one lady. “Inflation is everywhere, but wages are not rising, and already today I buy fewer things with the same money.” “In food I see great precision,” says another. “We now need twice as much money to buy the same amount. We used to go out to eat once a week, but today that’s considered a luxury.”
Is Putin really to blame?
For Prime Minister Mateusz Morawiecki, the main reason for the rise in inflation is Russia’s invasion of neighboring Ukraine. The Polish government is trying to put a “brake” on the rise in prices by reducing, at least temporarily, the VAT on basic foodstuffs, fuel and electricity. The head of the central bank, Adam Glapinski, is optimistic, pointing out, however, that it will take time to suppress inflation. “Despite the good state of the economy we have a high rate of inflation,” says Glapinski. “We will fight inflation, but it will take about two years. We are moving cautiously because we want to treat the patient, not kill him.”
This week Poland’s central bank made another rate hike, the eleventh since the crisis began. Today the base interest rate is 6.75%. “Expensive money” further burdens the economy and especially floating rate borrowers. Many economists point out, however, that high interest rates are not going to fight inflation, when at the same time the government is handing out pre-election “handouts”.
Agnieszka does not have much hope for the future. In her attempt to survive she has already found a second job, as a nurse, for the hours she is not working at the grocery store. And if this situation continues, he will prefer to change his profession and keep only the hospital job. “If we’re working in the store just to pay bills, then we better shut it down,” he says.
Adam Martin (ARD)
Edited by: Yiannis Papadimitriou
Source: Deutsche Welle