2024-10-03 21:22 update: 2024-10-08, 14:51
Photo PAP/Radek Pietruszka
Poland's inflation is expected to be in the range of 4.5 - 5.0 percent at the end of the year, Adam Glapinski, governor of the National Bank of Poland (NBP) has said.
Glapinski made the statement at a press conference on Thursday following the Monetary Policy Council's (RPP) Wednesday decision to keep all interest rates on hold.
"As for the future decisions of the Monetary Policy Council, they will... depend on the further inflation outlook... on the incoming data, he told reporters.
"Available forecasts indicate that the consumer inflation rate (Consumer Price Index CPI - PAP) may remain around 4.5 percent to 5.0 percent until the end of this year and at the end of this year," he added.
Glapinski also said that the prospects for 2025 depend in particular on whether the government's protective measures regarding electricity prices will be maintained or completely withdrawn.
He added that the factor that will increase inflation next year is the announced increase in excise tax on tobacco products and a further increase in excise tax on alcohol.
According to him, inflation will be increased until mid-2025, then will start to go down, finally returning to the NBP target of 2.5 percent plus/minus one percentage point only in 2026.
"Until around the middle of next year, inflation may be elevated. After that, it is expected to start declining, according to the currently available projections, but only in 2026, when the effects of the energy price hike have died out and been absorbed by the economy, CPI is expected to return permanently to the RPP's target," Glapinski said.
He also said that for now there are no grounds for changing the decision on interest rates and a discussion on possible cuts will only be possible after the publication of the March inflation projection.
"If the data in March shows that inflation is stabilised and this continues in the following quarters, the Monetary Policy Council will begin a cycle of interest rate cuts," Glapinski said.
"At the moment, it seems that we will possibly cut interest rates after March 2025," he added.
Poland's inflation edged up to 4.9 percent in September from 4.3 percent in August, according to the flash estimate by the Central Statistical Office. The NBP has kept its reference rate at 5.75 percent for nearly a year now. (PAP)
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