Inflation will remain at a high level in the coming months but it should soon start declining owing to a drop in the annualised growth of energy prices, Adam Glapinski, governor of the National Bank of Poland (NBP), has said.
Glapinski made the statement at a press conference on September 8, which followed the central bank’s September 7 decision to raise the main interest rate by 25 basis points, to 6.75%, in a bid to battle record-high inflation, which reached 16.1% in August.
“We estimate that the contribution of energy prices to inflation was 5.9% in August and that of food was 4.6%,” he said and added that inflation was still growing, but at a slower pace than before.
According to Glapinski, the summer likely saw a turning point in inflation readings.
“As far as inflation alone is concerned, and just like the NBP said earlier, the summer was probably a turning point for Poland’s inflation, the inflation peak, this is this plateau, it may go up a bit, down bit, and then inflation will gradually decline,” he said.
The central bank head admitted that economic activity had been showing signs of a slowdown, but according to him the condition of the economy was still very good, and there was no recession threat.
“A number of countries are likely to see a recession, but Poland is not,” he said.
According to Glapinski, Poland’s inflation has a chance to decline to about 7% during 2023 and to go down to 3% at the end of 2023 provided that the government maintains the current anti-inflation package of tax cuts, and regulated prices are left intact.
“But most probably this is impossible, because the government would have to find huge amounts of money to finance it,” Glapinski concluded.
The NBP head also hinted that the central bank might start cutting interest rates in the middle or at the end of 2023. (The First News/Business World Magazine)
