Forecast of price changes in Poland in 2024

Forecast of price changes in Poland in 2024

Good information to start with. The freeze on energy prices has been extended. The law adopted in mid-December by the Sejm involves limiting the impact of rising prices for electricity, gas and heat on the most vulnerable consumers - households, local governments and housing and communal services entities.

Good information to start with. The freeze on energy prices has been extended. The law adopted in mid-December by the Sejm involves limiting the impact of rising prices for electricity, gas and heat on the most vulnerable consumers - households, local governments and housing and communal services entities.

The maximum electricity prices for households at PLN 412 per MWh net have been extended until the end of June 2024 (up to the current level of the consumption limit, reduced by 50%), because the rules must be in force for six months).

This amounts to 1500 kWh for households, 1800 kWh for people with disabilities, and for farmers and families with a large family card 2000 kWh. Above the limit, the rate of PLN 693 per MWh remains as the maximum price.

The approved tariffs for 2024 are lower than for 2023, but this does not mean a reduction in the accounts of recipients covered by the price freeze, including tariffs. Frozen rates are lower. In addition, there are components of the electricity bill, such as distribution charges. And it will increase by several tens of pennies for every kilowatt-hour.

The law also supports the maximum price for gas fuel and tariffs for the provision of gas fuel distribution services. Covered entities will pay for distribution services during the period from January 1, 2024 to June 30, 2024 at the level established by the tariff approved for the distribution system operator for 2022.

However, despite the moratorium on gas price increases, in 2024 distribution fees paid by gas consumers will increase by an average of 5%.

Coal prices will decline in 2024. The reasons for this decline are seen in economic initiatives associated with a shift away from the use of this raw material and a decrease in demand for coal storage. However, a lot depends on geopolitical events and, as a consequence, on supply disruptions. Coal prices may also be affected by weather conditions that cannot be predicted.

There will most likely not be a price freeze in the second half of the year. The lifting of the price freeze could lead to a significant increase in prices - up to several tens of percent. How accurate? Today this is difficult to predict. Failure to do so will be costly. If not for government measures, bills could have increased by 60-70%.

Rising energy prices will very quickly affect the prices of other products. Analysts estimate that if there were no safeguards in place in 2024, inflation would immediately increase by two percentage points.

Food prices are rising again

In 2024, Poles should expect food prices to rise. The changes, however, will not be sudden. On December 9, a decree was published extending the use of the zero rate on food products. It will be valid until the end of March 2024.

A rise in prices cannot be avoided, although it will not be as strong as last year. Price growth in 2024 will be 6.1% versus 15.3% in 2023. This is a clear decline, but still a fairly high growth rate.

Prices for bread will increase moderately, by about 8%, meat - by 7%, fruit - by 10%, and vegetables and dairy products - by 5%. There are few products that will not rise in price or become cheaper.

Poles will also have to reckon with rising prices at gas stations. From January 1, fuel prices will increase. There are two reasons. Firstly, in 2024 the fuel surcharge for all types of fuel will increase by 13.2%.

The price, according to published data, will be 195.74 zlotys per 1000 liters of gasoline versus 172.91 zlotys in 2023.

The price for 1000 liters of diesel fuel, in turn, will be 422.13 zlotys versus 372.90 zlotys in 2023.

Fuel surcharge is one of the components of the price of gasoline and diesel fuel at gas stations. The fuel surcharge is currently 3% of the price of 95 petrol and 6% of the price of a liter of diesel. In the first case, it averages 0.17 zlotys per liter of Pb95, in the second - 0.37 zlotys per liter of diesel fuel. Following the decision to increase the fuel surcharge, prices at gas stations may rise by a few pennies per liter. The amounts are relatively low, but it is worth remembering that Poles spend 194 billion zlotys on fuel per year.

The second reason is that we can expect a slight weakening of the zloty and this could ultimately lead to an increase in fuel prices.

It is impossible not to mention the new fuel that will appear at gas stations. From January 1, 2024, gasoline with the designation E10 will appear at gas stations, and Pb95 will disappear. This change will primarily affect owners of older cars who will not be able to refill it. The Ministry of Climate and Environment estimates that the problem affects almost one in 10 cars registered in the country.

Owners of older car models will have no choice but to use Pb95, and this gasoline is more expensive. On average, this is about 30 zlotys more per tank.

Social security contributions and the minimum wage. Higher costs for entrepreneurs

Poles may also feel an increase in taxes for entrepreneurs in their portfolios. The pension contribution will increase by 19.52%, profitability by 8%. This is because the amount of social security contributions in 2024 for entrepreneurs who do not have discounts is 60% of the average monthly salary, i.e. at least 4694.40 zlotys.

ZUS contributions will increase by leaps and bounds in 2024 due to the Ministry of Finance's forecast for an increase in average wages in 2024 for 2 million entrepreneurs.

All mandatory social contributions are projected to increase from PLN 1,732.58 to PLN 1,976.68.

İçermek:

• Emeklilik katkısı 912,83 PLN olacaktır,

• engellilik maaşı - 374.11 PLN,

• hastalık izni - 114,57 PLN,

• kaza - 78,10 PLN,

• Çalışma ve Dayanışma Fonu'na - 114,94 PLN,

• sağlık - 382,50 PLN.

In addition, the minimum wage will be increased for entrepreneurs. From January 1 it will be 4242 zlotys, and from July 1 - 4300 zlotys gross. This means an increase in costs for the employer of about PLN 850 gross per month. The high dynamics of growth of the minimum wage in 2024, i.e. by 18%, will affect wage growth in the economy as a whole. We will also have to take into account the very unfavorable phenomenon of expanding the gray zone.