September 26, 2022

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What next after interest rates and inflation in Poland?  Take the floor MPC

What next after interest rates and inflation in Poland? Take the floor MPC

– I’m so convinced August inflation reading at 16.1%. It was the highest reading in 2022. We expect we’ll have a few tenths or maybe 0.4 points in the following months after the holiday season. Percentage month after month, lowering inflation. (…) If confirmed, I think the end of the rate hike cycle will be. It is very close. Wednesday’s rate hike may turn out to be the last in this cycle. Maybe another one will come, minimal too Wnorowski said.

What next after interest rates and inflation in Poland? Take the floor MPC

– It seems that these are, of course, the government’s decisions to extend the anti-inflation shield. The extent to which URE will allow energy suppliers to increase prices and to what extent the government will compensate them for the differences will be of fundamental importance to us. This will give us an answer to the question of how much inflation will increase in January, because we should expect a certain increase after the decline by the end of the year. In retrospect, I think so deeply, that during 2023 we will have to deal with low inflation – he added.

And Norovsky pointed out that the data and predictions do not indicate this A significant deterioration in the situation in the labor market should be expected.

– We have statistics on the number of vacancies and it is decreasing, but it is only decreasing, vacancies are still there. “I think you shouldn’t expect a strong negative impact here,” he added.

Different opinions, different hypertrophy?

It is clear that our current economic situation will lead to higher interest rates. In what amount and in what horizon – it’s crucial. We have very negative real interest rates, accelerated inflation and a bad economic situation. Inflation should be close to 2.5 percent, at 16.1. NBP is not at liberty to decide here whether it wants to raise interest rates or not – noted RMF FM.

Ludwik Kotteke, a MPC member and former chief economist at the Treasury under Donald Tusk, has a similar view.

There is a high probability that inflation in January or February 2023 will exceed 20%. – Kotecki said in Polsat News.

Economists at Bank Santander Polska think similarly. In the base scenario, they expect a peak of inflation at the beginning of 2023 at the level of 18-19%. On an annual basis (after stabilizing in the fourth quarter of 2022) and then its gradual decline to about 8%. At the end of 2023

“However, the uncertainty regarding energy prices and preventive measures by the government means that the margin of error for these forecasts is huge (in the theoretical scenario to prevent any increase in energy prices by the government, inflation could fall below 5)” – they say.

What will NBP do?

The Monetary Policy Board raised interest rates in September by 25 basis points. It was the eleventh consecutive increase and the lowest in the current cycle, which has been running since October 2021.

President of the National Bank of Poland Adam Glapinski He said at the conference after the September meeting of the Monetary Policy CommitteeIt is possible in October to either keep interest rates unchanged or increase them by 25 basis points. He added that the Monetary Policy Committee has not officially completed the rate-raising cycle, further decisions will depend on the data received, and in the middle or fourth quarter of 2023, it is already possible to cut interest rates.

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MPC member Ireneusz Dąbrowski wrote Friday evening that in his opinion the rate-raising cycle in Poland is over.

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