Poland's price processes still fundamentally unstable, says MPC member
Poland's inflation in July will be close to 2.6 percent, but price processes are still fundamentally unstable, the Monetary Policy Council member Joanna Tyrowicz assessed on LinkedIn.
"In July this year, inflation will probably be roughly similar to June last year. (2.6 per cent year-on-year - PAP ed.] So what? Take the preliminary inflation estimate for June. Poland's stats office GUS reported 4.1 percent year on year. (...) It's just that this 4.1 percent is an average of minus 10 percent on fuels and very positive values for food, some goods and services," Tyrowicz wrote on LinkedIn before GUS confirmed June's inflation reading of 4.1 percent.
"For July, the average will look even better, but for purely statistical reasons: in the prior year period, energy prices were partially unfrozen, so this 'above-normal' increase a year ago will find its almost mirror image in the 'above-normal' decrease this year. But this most likely lower inflation measure than in June is unfortunately not evidence of stabilised price processes. We still have fundamentally unstable price processes," she added.
At every MPC meeting from November 2023 until May this year, Tyrowicz requested a 200-basis points rate hike. The economist voted against a 50-basis points rate cut in May.
After another 25-basis points cut in July, Poland's central bank NBP reference rate stands at 5.0 percent.
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