Causes and effects of inflation in Poland

In the paper it is discussed the causes and effects of inflation in Poland. The paper analyzes inflation in recent years, including changes caused by the outbreak of the COVID-19 pandemic. Undoubtedly, the spread of the coronavirus has contributed to the changes in the economy. Inflation is one of the main macroeconomic indicators that reflect the economic situation of a certain country. It occurs when the prices of goods and services in the market increase, so each subsequent year you can buy less for the same amount. Inflation occurs when the price increase is constant and persists over a specific period of time, then the purchasing power decreases (M. Gamrot, 2014). It is not a rule that the overall price index is influenced most by the products that have the greatest price appreciation. The pass-through to the inflation rate also depends on the share of a product's "weight" in conventional household consumption expenditures. CPI inflation in 2021 in Poland is influenced, to the greatest extent, by energy prices causing food prices increase and core economic inflation. The factors forming inflation, are the so-called, inflation expectations significantly influencing consumption or investment decisions. Measures taken in the economic policy, such as a significant loosening of monetary or fiscal policy contributed to the mitigation of the effects of COVID-19.