Poland to see room for interest rate cuts in near future, says NBP governor
The prospects for a return of inflation to the target are looking more optimistic than previously anticipated, and it can therefore be assessed that there will be room for interest rate cuts in the near future, according to a speech by Poland's central bank NBP governor Adam Glapinski published in NBP's official news bulletin Obserwator Finansowy (Financial Observer).
"Today, inflation is elevated, close to 5 percent. This is primarily the result of regulatory and fiscal factors. On a positive note, however, the inflation outlook has clearly improved recently. In particular, the revision of [Poland's stats office] GUS inflation basket data meant that the inflation rate in the first quarter turned out to be clearly below expectations," said governor Glapinski, as quoted by Obserwator Finansowy.
"At the same time, wage dynamics in the economy are slowing down, which is desirable from the point of view of aiming for a sustained reduction in inflation. There has also been a strong decline in oil prices on world markets," he added.
As the central bank governor assessed, all of the factors mentioned above make the prospects of Poland's MPC lowering rates in late spring more realistic and the outlook looks more optimistic than it had been assumed so far.
"All this makes the prospects for a return of inflation to the inflation target look more optimistic than we have so far anticipated. It can therefore be judged that in the near future, there will be room for a reduction in interest rates, which we have all been eagerly awaiting for many months now," Glapinski said.
tus/ ao/
