Additional Polish fee hikes this cycle is probably not mandatory, says c.banker Wnorowski By Reuters

© Reuters. FILE PHOTO: A emblem of the Polish Central Financial institution (NBP) is seen on their constructing in Warsaw, Poland, September 8, 2022. REUTERS/Kacper Pempel/File Photograph

WARSAW (Reuters) – Additional rate of interest hikes in Poland within the present cycle is probably not mandatory if the economic system strikes consistent with the estimates included within the November inflation projection, central banker Henryk Wnorowski stated.

At its November assembly the Financial Coverage Council (MPC) saved its important rate of interest at 6.75% for the second month in a row, and Nationwide Financial institution of Poland (NBP) Governor Adam Glapinski stated the speed hike cycle was being paused however may proceed.

“For my part, it can’t be unequivocally declared that that is the top of rate of interest hikes. Nevertheless, I feel it might be the top of this cycle, given the beneficial circumstances and a excessive chance that the state of affairs from the November projection will come true,” Wnorowski instructed Reuters in an interview.

The brand new central financial institution inflation projection reveals that inflation in Poland is not going to return to the NBP’s goal vary of 1.5%-3.5% till the third quarter of 2025.

“Whether it is right, there could also be no extra hikes, though I wish to stress that the Council remains to be targeted and decided to combat inflation,” he added.

“Our break proves that we are not looking for choices on additional hikes which might maybe velocity up the tempo of reaching the goal however lead to prices which might be too excessive,” Wnorowski stated.

Whereas he believes Poland will not be heading for a recession, GDP progress forecasts are low.

“There are lots of indications that the primary quarter of 2023 will see a decline in GDP, primarily because of the base, an excellent first quarter of 2022. However whether or not 0.7%, 1% or 1.2%, these are nonetheless not very comfy progress forecasts, he stated.

Wnorowski stated he expects inflation to peak within the first quarter, in March, at between 19-20%, after which the speed of worth progress ought to decelerate considerably.

“As soon as we report the primary studying on the opposite facet of the ‘inflation hill’, the tempo of its decline shall be quick. Personally, I hope that subsequent yr inflation shall be decrease than within the projection, the place it was 13.5%,” he stated.

“Nevertheless, a descent to single-digit inflation subsequent yr is unlikely,” he added.

Polish inflation hit 17.9% in October, persevering with to rise on hovering vitality costs.