Stagflation in Poland is no longer science fiction. Why is it so dangerous?
– Poland speaks towards stagflation – directly prof. Witold Orłowski. The economist is one of the first outbreaks of the risk that you face before the pandemic breaks out. What is stagflation and why is it so dangerous? The expert explains that this is a trick, the Polish economy may not be able to get hold of it for years.
- Stagflation for business stagnation and accelerated price increases. We guarantee him growing unemployment
- Economists are talking about this scenario louder and louder. And to not only in Poland, but also in many other countries, only in the old euro
- According to prof. Witold Orłowski, stagflation is like a trap for the economy, the way out of which will be very difficult. And it may take many years
- You can find more such information on the Onet homepage
The government camp sees no risk of stagflation. The president of PFR, Paweł Borys, spoke about it in the city.
Progress now we are not stagflation, that is, the increase in progress called for a decline. – Because the recovery from the pandemic is very important, what are the representations of the transition of the economy in certain market segments. Breaking supply chains are a big challenge. Waiting time for decisions regarding changes. This resulted in a production stoppage in IT equipment, electronics and industry. This does not mean that the risk of stagflation in the world will not be achieved by 2023. Commodity economy prices high, and all that the dynamics of growth in the national economy will decline in 2023 to maintain the level of periods of GDP growth, with the help of creating. In fact, in Poland this risk is very controversial, because the growth dynamics should be at the height level – he said in Borysy.
Anyway, the president of PFR may look for allies in Europe. In relation to her recent speeches, Isabel Schnabel, who sits on the board of the Central Bank, speaks in a similar vein.
Its risk of stagflation is negligible. First of all, because the ECB has no economic symptoms in the euro area countries.
The rest of the article is below the video
What is stagflation?
Therefore, something is really stagflation. For high-quality business with even low economic growth.
A few weeks ago, Rafał Hirsch wrote about it in Business Insider Polska, explaining very vividly the mechanism of this phenomenon.
Under normal circumstances, when it comes to the economy or the economy, and at the same time as an effect and inflation, or it is in the best recession, we have a crisis, GDP is falling, unemployment, but at the same time the problem with inflation disappears, because no one raises prices in a crisis and adopts the market .
Stagflation takes the worst of these two ‘normal’ scenarios together – high inflation and economic downturn, and even if it leads to a recession, it still doesn’t erase mom. It is unable to do this because its causes are different.
– we read in a comprehensive material.
Until now, the dominant scenario in which the economy will bounce back like crazy after the pandemic and we will have more years. Inflation? This is only a temporary story, caused by supply shocks. Such a narrative was also built by, among others President of the National Bank of Poland, Adam Glapiński.
Each subsequent month that reveals the levels invisible from dawn to us the accumulating history of economists about “their own scenario” in which stagflation could be.
A trap that is hard to find
Prof. Witold Orłowski, chief economist at PwC, started talking about the stagflation risk before the outbreak of the coronavirus pandemic. In his 2020 column for Rzeczpospolita, he wrote:
“Admitting to the deposit of failures is not pleasant. But the rulers realize that if the Polish language gets stuck in a stagflational grace, even the deposit of failures is not equal to public television.”
The expert argued that he was preparing to introduce himself to the uprising, he did not start, for example, to create new investments, and the level of investments in the economy, instead of growing. It is not much better on the labor market, where there was a shortage of workers before the pandemic.
So why is stagflation a bad thing for Poland to escape from? Prof. Orłowski explains it today at Business Insider Polska.
– Backagflation the economy is in good shape, does not know how to trade – the translator.
The problem remains that both phenomena (economic slowdown and high inflation) occur simultaneously.
– When we are dealing with the slowing of the economic slowdown, it is the easiest way to improve the growth on the decline – says prof. Orłowski.
However, they quickly appear constantly – In turn, in the case of frequent ones, you should raise rates, which is what we do today. The problem is that you can’t do both at the same time – he explains economist.
In such a situation it is first necessary to rule which phenomena to stop first. Even at the expense of the latter.
When overcoming stagflation, it may arise that in response to growth, the government may come to terms with very high inflation. High High than we are today. Or: to stifle, the country could fall into recession.
In Germany, prof. Orłowski, it is so important that it did not materialize due to the risk of stagflation.
