There are growing concerns that lower fuel prices will not achieve their intended goal. According to an increasing number of experts, the inflation target may turn out to be tail chasing. A vicious cycle can bring you even more trouble in the long run. Shedding the lifebuoy as planned could have an even greater impact on inflation.
Is it worth interfering with fuel prices?
The Polish economy has recently been backed by one word – a shield. All appearing fires have recently been extinguished only with all kinds of shields. Economist prof. Witold Orłowski made a very strong thesis on this issue. – Today’s inflation is unfortunately the fruit of neglect of the last few years. The answer is not to sprinkle people with money to keep them from feeling the price increase. After all, this will drive inflation even more – we read his words on Business Insider.
The upcoming inflation target, according to the announcements about which we know, is to be a rescue. We are talking about a rescue in the form of distributing energy vouchers to Poles and the planned reduction of excise duty on energy carriers. According to many experts, this is not a rescue, but an artificial and mainly image-related aid, which may bring about the opposite result.
– Stimulating consumption without caring for investment was a simple recipe for inflation, which many economists warned about long ago – said prof. Orłowski in an interview with Business Insider. Therefore, lower fuel prices may turn out to be a moment, and soon it will be more than necessary to return what the government covered earlier.
The rescue turns out to be symbolic anyway?
There are many voices that the problem will sort itself out. But the point here is that neither interfering with fuel prices will do nor help. It will simply be so “invisible” to the average driver that it will also be difficult to influence, for example, the amount of fuel refilled.
However, these are all speculations to a large extent, because life will judge how much the inflation shield is worth. Much more can be said by judging it when the finished project is presented. This should happen within the next few days.