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Inflation Leaves No Room for Rate Cuts in Poland

Poland's central banker Ludwik Kotecki said that double-digit inflation in Poland leaves no room for loosening monetary policy this year, but interest rates will not rise further.

Narodowy bank polski
Narodowy bank polski 

The introductory interest rate stayed at 6.75% for the fourth month in January, and inflation for December came in lower than expected. Kotecki said that even talking about lower rates at the moment risked weakening the impact of monetary policy. Kotecki's views followed comments by Central Bank Governor Adam Glapinski, who said he remained hopeful a rate cut could happen this year, despite still rising inflation rates.

Inflation is to Peak in February, Gradually Decrease

A statistics office flash estimate showed that inflation was 16.6% in December. Kotecki said that in 2023 average annual inflation will be around 14%, and it will peak in February at approximately 20%. After that, the price growth rate will gradually decrease, and at the end of the year, it may stabilize at a lower but double-digit level of 11-13%. Kotecki believes inflation will still be far from the inflation target of 2.5% plus or minus one percentage point in 2024.