2011 to bring higher foodstuffs prices

2010-08-30

The prices of foodstuffs are estimated to grow by between five to six percent in 2011, according to Rzeczpospolita. The rise is the effect of higher VAT on nonprocessed foodstuffs, and a low harvest that will be 15% smaller than in 2009. Due to bad weather, the prices of fruits and vegetables have already gone up by between three or four percent.
Still, the Ministry of Finance points out that higher VAT on nonprocessed food, i.e., meat, vegetables, fruits and grains, will be bridged by lower VAT on processed foodstuffs and therefore the average monthly expenses for families will not grow. In the case of nonprocessed food, the prices are expected to go up by 0.6 p.p., while processed food is to be cheaper by 0.9 p.p. Also, VAT on coffee, tea, juices and alcoholic beverages will increase from 22-23%, which will result in a 0.2% rise in prices.
Therefore, the Ministry estimates that the monthly spending of an average family of four members will go down by 0.1 p.p. in 2011.
In turn, Bohdan Wyznikiewicz of the Institute for Market Economics (IBnGR) underlines that the prices of grains have a significant influence on prices of numerous foodstuffs and therefore the higher VAT in connection will the low harvest may lead to a decrease in consumption. As a consequence, the spending of poorer families may go down by between 20-30% in 2011.