Deflation makes Christmas cheaper

Photo: Glowimages

Goods and services related to Christmas preparations may be between 2 and 30 percent cheaper than they were in 2013, according to an analysis carried out by daily Dziennik Gazeta Prawna.

Prices are lower in the case of most food products, especially in those categories that are subject to Russia's import ban.

The biggest price reductions have been recorded in the Auchan and Alma Market networks, but discount stores Lidl and Biedronka have also made cuts. In total, price differences between networks have become smaller.

The cost of petrol is also lower, with the average at 4.89 zloty per litre compared to some 5.39 zloty in December 2013. Diesel oil is some 60 groszy cheaper than a year ago and costs 4.85 zloty per litre on the average.

Wholesale fuel prices are still declining so prices recorded at filling stations will be even lower at Christmas time, Rafal Zywert from fuel market research firm BM Reflex told the daily.

Marta Petka-Zagajewska, economist at Raiffeisen Polbank, explained that there is a surplus of both food and fuels on the global market. Together with the effect of the Russian embargo in Poland, it results in deflation.

“Nevertheless, I think consumers still do not feel they are paying less,” Petka-Zagajewska said.

“For the time being, they are behaving like in times of inflation, which means they are buying with the assumption that prices may rise.” (kw)

Source: Dziennik Gazeta Prawna