“The conditions for conducting monetary policy are becoming more and more complex. Inflation data for Friday Show that there are vague signs of loss of growth, but We continue to see the peak later than what the NBP chief said recently (not at the end of the year and in the first quarter of 2023, not in July 2022)” – Bank experts wrote in “Tygodnik ING”.
At the same time, they warned that “significant long-term inflation threats exist,” which include:
- Powerful effects in the second round.
- Comparative research by ING, which shows very high inflation expectations in Poland compared to developed countries.
The MPC has arguments for further rate hikes
What does this mean for the Poles? First of all, the monetary policy board may continue to rise in the face of such a scenario interest ratesalthough the pace of increases may be cooled by the June PMI reading that warns of an economic slowdown.
“The GDP forecast for 2022 will not change much, but it will decrease in 2023. In our opinion, if the MPC gives too much importance to the economic situation and raises interest rates by 50 basis points, the PLN will lose significantly (and it is already happening). A call of 75 basis points will be critical, while a move of 100 basis points will be somewhat positive for the zloty” – added the bank’s economists, noting that this year inflation And the annual average will reach 13.8%, in the next 11.3%, and in 2024 it will not return to the level of the NBP target.
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