1995 Reports

Inflation and Stabilization in Poland 1990-1995

Wellisz, Stanislaw H.

The Polish liberalization and stabilization program put into effect on January 1, 1990, called for the removal of virtually all price controls, and for a sharp curtailment of production subsidies. These measures magnified the effects of pre-existing inflationary forces. Within one month retail price index rose by 79.6 per cent. The inflation was, however, quickly brought under control by the stabilization measures adopted as a part of the reform package. By August the rate of price increase declined to a 1.8 percent monthly rate. Yet the goal of complete price stability by year-end proved to be elusive. In 1991 prices still rose by over 70 percent; in the subsequent years inflation slowed down, but it remained at a two-digit level (Table 1).