President of the National Bank of Poland, Adam Glapiński: Inflation in Poland is now up, but then down
The message during the conference was similar to that from a month ago: inflation in Poland is rising again, which prompts the Monetary Policy Council to maintain interest rates. – We do not ignore this on our agenda – said Glapiński. According to the Central Statistical Office’s flash estimate, in September inflation amounted to 4.9 percent, which was almost twice as high as the middle of the NBP inflation target in the medium term (2.5 percent +/- 1 pp.).
Glapiński pointed out, among others, on the unfreezing of energy prices from July, but also on the probable increase in core inflation in September (from 3.7% in August probably to over 4% – the consensus of economists’ forecasts according to the “Rzeczpospolita” survey is 4.1%). – This is partly a base effect, but it may partly result from the persistently high wage growth – he explained. Wage growth primarily drives inflation in the service sector.
By the end of the year, inflation in Poland is expected to remain at 4.5-5%, according to the forecasts presented by Glapiński. year to year. Then its level will depend, among others, on: from the government’s decision to further freeze energy prices. For now, he is leaning towards this, but no binding decisions have been made on this matter.
– Inflation may increase until around the middle of next year – said the head of the NBP. – Then it will start to decrease, but only in 2026 – when the effects of increasing energy prices will be absorbed by the economy – will inflation permanently return to the inflation target – he said.
The head of the central bank also mentioned the increase in excise duty on tobacco products and alcohol as a factor that will slightly increase inflation in 2025.
Glapiński mentioned a number of uncertainty factors for inflation, although at the same time he discounted some of them. This is the risk of excessive economic acceleration from the point of view of inflation (“but it is limited”), continued high wage growth (“but we expect the pace to slow down”) or increased inflation expectations as a result of energy price increases. – We don’t see it yet, but only in winter and after winter will the increased electricity and heat bills begin to flow. We’ll see what will happen then, he said. Glapiński also assessed the draft budget for 2025 with the general government and local government sector deficit at 5.5% as pro-inflation. Another factor of uncertainty for the Monetary Policy Council are the conflicts in Ukraine and the Middle East, the latter including: due to the impact on oil prices.
