Poland's c. bank must remain focused on lowering inflation permanently to target - c.bank governor
In view of the prospect of unfreezing energy prices, with the expected economic recovery, high wage growth and elevated core inflation, the NBP's monetary policy must remain clearly focused on lowering inflation permanently to the target, Poland's central bank NBP's governor Adam Glapinski said in a recording released by the NBP.
"In the scenario of further energy price freezes in subsequent quarters (...) inflation is likely to be above 5 percent in early 2025, and any subsequent unfreezing of electricity prices could even extend the return to 2.5 percent," Glapinski said in a recorded speech at the annual meeting of the banking community.
"In such a situation, and in view of the expected acceleration of economic growth, high wage growth and elevated core inflation, the NBP's monetary policy must remain unequivocally geared towards permanently lowering inflation to the target," he added.
According to Poland's central bank governor, a lack of determination to permanently lower inflation to the target could raise medium-term inflation expectations and thus permanently undermine the cost of financing the Polish economy.
Glapinski pointed out that Poland has a high public finance sector deficit and public debt in relation to GDP is on an upward trajectory for the first time in a long time.
"The fiscal policy contained in next year's draft budget and public debt management strategy therefore limits the space for potential monetary easing," he added.
tus/ ao/ han/