High inflation will stay with us for longer? Not very optimistic forecasts
This year, inflation will be clearly higher than the NBP inflation target – according to the forecasts presented by the MPC.
On Wednesday, a two -day meeting of the Monetary Policy Council (RPP) ended. As expected by the body for the 16th time in a row, it decided to leave interest rates at the current level, which means that the main interest rate is still 5.75 percent.
In the announcement issued shortly after the announcement of the decision, it was announced that the MPC had read the latest results of inflation projection in Poland. – According to the projection-prepared by assuming unchanged NBP interest rates and taking into account the data available until February 27, 2025-the annual price dynamics will be with a 50 % probability in the 4.1-5.7 percent range. in 2025 (compared to 4.2 – 6.6 percent in the projection of November 2024), 2.0 – 4.8 percent. in 2026 (against 1.4 – 4.1 percent) and 1.1 – 3.9 percent in 2027 – we read in a message posted on the website of the National Bank of Poland (NBP).
Inflation is clearly higher than the target
According to the MPC, inflation this year will be clearly higher than the inflation target of the NBP (2.5 percent with a symmetrical range of deviations with a width of +/- 1 percentage point in the average period). The effects of earlier increase in energy prices, increases in excise tax rates and the prices of administrated services, as well as further frostbite of energy prices in the second half of this year will contribute to this.
– In the average period – at the current level of NBP interest rates and in conditions of expected gradual decrease in wage dynamics – inflation should return to the NBP target. The impact of increased inflation on inflation expectations and wage pressure remains a factor of uncertainty, especially in conditions of growing demand and low unemployment – it was written in a message.
Further activities in the field of fiscal and regulatory policy will also affect the shaping of inflation in the medium period.
We would like to remind you that according to preliminary estimates of the Central Statistical Office (GUS), consumer inflation in January this year. amounted to 5.3 percent year on year. This is the worst reading since December 2023, when 6.2 percent were recorded. We will know the final data for January and February on March 14.
