Although people perceive a significant increase in prices, especially in the field of food, food manufacturers see it a little differently. According to them, so far it has not become so expensive again. Definitely not as much as they would need to cover their costs, or to hedge against future risks. Therefore, another big wave of price increases is expected, which can be in the tens of percent.
The increase in pensions will be used
And why doesn’t it happen right away? Food producers and shops always raise prices only with a certain delay, when the trend is clear and when they can no longer cover the various fluctuations from their margins. Usually, we wait for the right moment, whether from a social or competitive point of view.
In this case, it seems to be waiting for the pensioners’ pensions to be valorised in June and they will receive an average of a thousand crowns. This is a fairly significant amount. These considerations were also confirmed by one of the food producers from the South Bohemian Region, who, however, does not want to be named so as not to have problems with it.
“Now we are basically just waiting for more money to be pumped into the pensioners. Then we will increase prices in a tangible way. We have been waiting a long time and the situation is so unsustainable,“Said a dairy producer.
A spiral that’s hard to stop
It is therefore evident that support for pensioners in the form of extraordinary valorisation is likely to have an effect. The increase in prices will absorb their increased pensions, or even exceed them.
Inflation is already falling at such a rate that it is very difficult to keep up, as this example shows. As soon as a space is created, manufacturers immediately use it and try to increase prices.
This is what the much-inflated inflation spiral lies in. Once it spins, it is very difficult to stop it. To put it simply, in an environment of rapidly rising prices, any additional money in the economy leads to an immediate increase in price. This will then require a further increase in pensions and salaries. And another increase. And so on and on.
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