Europe is afraid of inflation again. “The turn of the year may be crucial”
Rising commodity prices are again raising concerns about inflation in Europe. DGP forecasts that the most difficult moment may come at the turn of the year.
The European economy may face stronger price pressure again in the coming quarters.
“It is not yet inflation on a scale known from 2022 or 2023, but the increased price risk in key sectors in the coming quarters may spread to the entire European economy,” writes Dziennik Gazeta Prawna (DGP).
Gas, electricity and oil are under pressure again
DGP draws attention to the high prices of natural gas and the difficulties in rebuilding European reserves before winter. According to the newspaper, the situation on the gas market still directly affects electricity prices. In addition, there are tensions on the oil and diesel markets and continuing uncertainty related to the situation in the Middle East and the war in Ukraine.
According to DGP, citing analyzes of the Eurelectric industry association, the average wholesale price of electricity in the European Union is currently approximately EUR 127 per MWh. This is the highest level since 2023. At the same time, according to data from the Central Statistical Office (GUS), in Poland the prices of fuels and lubricants for private means of transport were 15.8% higher in July. higher than a year earlier.
DGP: the peak of price pressure may come at the turn of the year
The first signs of a rebound in inflation were visible in Europe already in July. DGP points out that earlier forecasts of the European Central Bank assumed both higher inflation and weaker economic growth in the euro zone.
“However, there are many indications that the peak of the next episode of the inflation crisis can be expected at the turn of this year and next year,” DGP forecasts.
According to the newspaper, such a scenario increases the risk of stagflation, i.e. the simultaneous persistence of elevated inflation and weak economic growth.
Poland has better forecasts for now
However, DGP emphasizes that the forecasts for Poland are currently less pessimistic. He reminds that the National Bank of Poland (NBP) predicts that inflation will peak at 3.2%. in the fourth quarter of this year. According to the NBP projection, the increase in energy prices for consumers is to be limited, and stronger pressure from food should appear later.
At the same time, DGP reminds that the risk remains high. Brent oil prices have already exceeded the levels assumed in the government’s shock scenario and recently returned to above USD 90 per barrel. If pressure on commodity markets continues, this may again affect the prices paid by European consumers.
