Taking into account the current forecasts for the development of the situation, the president of the National Bank of Poland (NBP), Adam Glapiński confirmed that he will urge the Monetary Policy Council to raise interest rates one more time, by at least 50 basis points. According to the president, inflation in the first quarter of 2022 will temporarily decrease thanks to the anti-inflationary shield, and in the second quarter, it will increase again to reach a maximum in June – above 8 percent.

The average inflation in 2022 will be significantly above the inflation target of the National Bank of Poland, which is 2.5%. +/- 1 percent. Glapiński predicts that inflation will not reach a significantly lower level until 2023, although the forecasts do not take into account the fluctuations currently relevant to the pandemic.

Adam Glapiński claims that the situation is evaluated considering the existing parameters. “In a moderately optimistic scenario, with the pandemic slowly decreasing, international transport prices will fall, and that gas and oil prices will be stabilized. The only cost that will surely increase will be the electricity price. Those high prices will act as a benchmark for inflation over time” said the president of NBP.

The Monetary Policy Council raised interest rates for the fourth time in a row. After that increase, the reference rate is 2.25 percent on an annual basis; Lombard rate 2.75% on an annual basis; deposit rate 1.75% on an annual basis; rediscount rate 2.30% on an annual basis, and the discount rate of 2.35 percent on an annual basis.

The President of the National Bank of Poland also stated that the situation of Poland is relatively good compared to other countries as national GDP has been successfully rebuilt to the level from before the pandemic and there is practically no unemployment in the country. Thus, he will persuade the Monetary Policy Council to raise interest rates one more time, at least by 50 basis points.

Arkadiusz Słomczyński