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27 lipiec 2020

In the last post we showed what inflation is. This time we will answer the question of how it affects our everyday life and how we should perceive purchasing preferences in the face of its growth.

Imagine what happens to your savings in high inflation. It can not only devour the interest earned completely, but also make the real purchasing power of your money much lower after the money is withdrawn than before it was placed in your bank account. Moreover, one of the typical responses to inflation is an increase in interest rates in order to prevent a rapid depletion of funds accumulated in deposits. However, this has its dark side in the form of an increase in all loan installments that we have pledged to pay off, probably in calm times.

The increase in the prices of energy and raw materials means that utility suppliers will recalculate fees and we will also pay more for the daily consumption of electricity, gas and water. However, this is not the end of bad news for our household budget. In addition to the previously discussed costs of food products, the same fate will also be shared by furniture, electronics / household appliances and services that we regularly use. When we realize how long the list of monthly expenses is, the more we see the danger of inflation.

The desirable situation in the economy is to keep the inflation index as close to zero as possible. This allows all market players to easily assess the situation and plan activities rationally. The predictable daily living costs for consumers as well as many corporate expenses help to make sound investments and reduce the risk of falling into unforeseen financial difficulties and the consequent bankruptcy, layoffs and unemployment.

However, when prices increase every year, and we notice it every time we reach into our wallet, it is worth thinking about the origin of the products we buy. It is worth investing in Polish products - both food and durable. The money spent will not only feed the national budget in the form of tax, but will help Polish companies to obtain more money to finance their own expenses, maintain production, employment and investments in development.