Poland’s National Bank has significantly raised inflation expectations, according to central bank chief Adam Glapinski’s responses to questions from Business Insider Polska. The head of the National Bank of Poland expects energy prices to be responsible for nearly half of inflation in 2022. The peak of price hikes will occur in June.
In response to questions from Business Insider Polska, NBP President Adam Glapinsky said the central bank has a new rough forecast for macroeconomic indicators for the next two years. Forecasts were made on December 20, 2021 and – as the NBP chief says – “it’s only preliminary.”
As we read in Business Insider Polska’s article, the National Bank of Poland’s initial forecast shows average annual inflation to reach 7.6% next year. vs. 5.1% in 2021
Business Insider Polska notes that the latest inflation forecast, which was given by central bank analysts at the beginning of November this year, suggests that inflation next year will average 5.8%. “The current forecast, although preliminary, assumes that it will be much higher” – confirms the website.
According to NBP, the maximum inflation will occur in June 2022 and will reach 8.3%, and then gradually decrease – to 6.2%. In December 2022
Inflation in Poland. Latest NBP Forecast
“Adam Glapiński acknowledges that the forecast takes into account the increase in electricity and gas tariffs for households approved by the head of the ERO – much stronger than previously expected. The forecast takes into account the introduction of an anti-inflation energy shield (January-March/May 2022) and in The field of food prices (reducing the value-added tax rate on food to 0 percent in the period from February to July 2022). Forecasts do not take into account other possible changes in non-profit rates “- writes the portal.
– The decision of the head of the Energy Regulatory Office regarding electricity and gas tariffs was issued after a record increase in electricity and gas prices and carbon dioxide emissions allowances in European and local markets. Household electricity and gas bills from 2022 will rise on average by about 24%, respectively. And only 54 percent in the first quarter of 2022, the increase in these prices will be weaker due to the operation of the anti-inflation shield. During 2022, fuel prices (due to an increase in coal prices in global markets), thermal energy (due to an increase in carbon dioxide emissions allowances) and food prices will be significantly higher, explains Adam Glapinski.
– The above factors mean that the annual average consumer price (CPI – editor) in 2022 will reach 7.6%, which is more than the expected 5.1%. In 2021. The maximum level of CPI inflation will occur in June 2022 (8.3%), then it will gradually decrease – to 6.2%. In December 2022 – adds the head of the National Bank of Poland.
Energy prices will account for half of inflation
According to the head of the National Bank of Poland, energy prices will account for almost half of inflation in 2022. – The annual dynamics of energy prices may even rise to 27%. June 2022 – Adam Glapinski confirms.
– In conditions of a rapid recovery in economic activity and extremely low unemployment, an increase in energy prices will directly and indirectly increase CPI inflation, raise the operating costs of enterprises and the prices of other goods and services that they determine, and stimulate a further increase in inflation expectations and wages. As a result, high inflation already covers most groups of goods and services, and the process of transferring high price increases to other groups of goods and services may become permanent, adds the head of the National Bank of Poland.
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Main image source: Ravi Joz / PAP
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