Adam Glapiński claims that his words about feet were “overinterpreted”
Adam Glapiński argued that he did not say that interest rate cuts could occur in 2026 at the earliest. His words were “overinterpreted” by the media. On Thursday, however, he admitted that inflation in Poland could rise to around 5% by the end of this year.
On Thursday, at his traditional monthly conference, the president of the National Bank of Poland and chairman of the Monetary Policy Council, Adam Glapiński, commented on the budget. This document was initially presented a few days ago.
Adam Glapiński on the budget for 2025
The NBP President drew attention to declarations that the budget has secured funds for freezing energy prices, which is supposed to limit the growth of inflation. He also referred to the large deficit.
— The government is planning a 5.5% GDP deficit. Much higher than the government announced in the spring. This is not a tightening budget, it is still a generous budget, open, loose. This causes the need for very large borrowing needs. Despite the EU’s difficulties with the excessive deficit procedure, tightening will be postponed for the coming years — he commented.
In his opinion, this generosity is directly connected to the election year. He admitted that the bloated budget will have a negative impact on inflation and will make it difficult for the Monetary Policy Council to implement an effective monetary policy.
What about interest rates?
Adam Glapiński predicts that inflation in Poland may rise to around 5% by the end of this year. The price index should fall from mid-2025, but it will only be possible to return to the target consistent with the NBP inflation target in 2026. This is according to the July projection, developed with the assumption of unchanged interest rates.
— Due to the price increases of energy carriers, inflation is currently above the NBP target. Available forecasts indicate that at the end of this year inflation will be around 5 percent, it may exceed this level. There are factors that will affect this dynamics, which are difficult to predict now. Inflation may even increase at the beginning of 2025 if protective measures are withdrawn in their entirety — said the NBP president.
He referred to the July conference, after which the media wrote that he had made it clear that interest rate cuts were possible no earlier than 2026. He argued that this was a misunderstanding of his words, and that the cuts could occur earlier if it turned out that inflation would fall and the forecasts in this regard were optimistic.
