Poland’s central bank should be the first to raise interest rates in 2022. There is no doubt that after a sharp revision of inflation forecasts on Tuesday, the institution will decide to raise interest rates for directors, according to Bloomberg analysts.
Of the 17 economists surveyed by Bloomberg, 15 expect the key interest rate to rise by 50 basis points to 2.25%, and two expect a 75 basis point increase, leaving the rate at 2.5%. Monetary policy decisions will be made on Tuesday, but only tomorrow, Wednesday, the governor said. Adam Glapinsky will hold a press conference to explain the choice of the central bank.
Poland’s central bank has already started raising interest rates last year. In the last three meetings on monetary policy, he raised the key rate three times, but even so, it lags behind Hungary or the Czech Republic, which have shown even more aggressive measures to curb inflation. Gov. Adam Glapinski warned last week that further interest rate hikes would be required to contain price increases. According to the ministry’s forecasts, inflation will peak in June and should exceed 8%.
As in the rest of Europe, prices are being pressured by energy – in Poland, notably rising natural gas prices – with resistance to interest rate hikes earlier out of fears of a slowdown in economic recovery as the health panorama is exacerbated by the omicron variant of covid-19.
The difference is that Poland’s Monetary Policy Council expects inflation to remain very high over the course of this year – which cannot be said for the European Central Bank, which expects a pullback from the second half of 2022.
