By: The Quinnipiac University Economics Research Team, Michael Szwaja
This is the second in a series of short analyses looking at Consumer Prices (via the CPI) in Central Europe with this report featuring Poland and Hungary. The CPI provides information on the prices of goods and services purchased by households. An increase in the CPI is an increase in the price of a selection of goods and is equivalent to a decrease in the purchasing power of the local currency. The decrease in purchasing power is also known as inflation. The combined CPI analyzed here is Eurostat’s Harmonised index of consumer prices (HICP) for Poland and Hungary, based on 12 subgroups of consumption expenditure (according to the so-called COICOP-classification), and detailed metadata. The graphs convey monthly CPI data for Poland and Hungary during 2020 (January-September).
For Poland (blue), the CPI gradually increased until April then saw a brief spike which lasted until June. Since that time it has more or less settled around 136. The Polish CPI has increased about 3% year to date. Hungary’s CPI also rose early in the year and flattened around the month of July. The CPI has gradually lowered since then to hover around 165. Since the beginning of the year Hungary’s CPI has increased about 2%.
Both countries appear to express similar trends of increasing during the earlier part of the year, then tapering off in recent months. The pandemic, which began around March of this year, lowered some prices but raised others, so its exact impact on prices is unclear. The few months of sharply rising prices looks like it coincided with the period of large fiscal stimulus that came as part of a pandemic relief effort. Furthermore, the pandemic may have played a role in the modest price growth from the last several months of data, particularly from June to September in Poland and July to September in Hungary.