Effect of inflation on Poland’s economic growth in 2021-2022

Abstract

PURPOSE: The present study is an analysis of inflation and economic growth. Its purpose is to present the impact of inflation processes on economic growth as well as to formulate the relationship between these two basic economic categories.

DESIGN/METHODOLOGY/APPROACH: Secondary information sources were used in the study, mainly economic reports, available literature on the subject, statistical data retrieved from the Polish Central Statistical Office (GUS), as well as EUROSTAT statistical information. Published sources were analysed and reviewed using a descriptive approach. Statistical data was analysed by means of the Pearson linear correlation coefficient and the linear and polynomial trend model.

FINDINGS: Statistical analysis confirmed the existence of a moderate relationship between the inflation rate and the economic growth index. The relationship is inverse, i.e. the higher the inflation rate, the lower the economic growth index.

PRACTICAL IMPLICATIONS: A low inflation rate has a long-term positive impact on the rate of economic growth, vindicating the choice of price stabilisation as a goal of monetary policy.

ORIGINALITY/VALUE: The analysis of macroeconomic phenomena in the post-pandemic period seems to be necessary to explain the course of current economic processes. The lockdown has weakened national economies, but the relationship between inflation and economic growth has not changed its nature. Therefore, it seems justified to continue research on such relationships.