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Adam Glapiński, president of the National Bank of Poland, says that retail chains are responsible for most of the price increases

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The MPC has decided to end the cycle of interest rate hikes, the president of the National Bank of Poland, Adam Glapiński, announced at a press conference. He added that at the end of 2023 inflation in Poland will be at the level of 7-8 percent, and in the second half of 2025 it should come down to the NBP target.

– The Monetary Policy Council has decided that we are ending the cycle of rate hikes. Officially, we were in a cycle of raises, we were ready all the time to make a raise, now we are putting this weapon aside. No one expects something like this to happen anytime soon. It is an informal tool, but it is important for the market that we do not anticipate any hikes, said Glapiński.

“Of course, if something happens, in emergency mode, we can take that action, but we are no longer in that mode,” he added.

Inflation in Poland

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– According to NBP projections inflation at the end of the year will be between 7 and 8 percent. – so it will already be single-digit – said the head of the National Bank of Poland.

The President of the NBP added that in the coming quarters and years inflation will decrease. He stipulated that it was impossible to predict in detail how much inflation would be at the end of the year – in December this year.

“In the second half of 2025, inflation should come down to our NBP inflation target, i.e. 2.5 percent plus/minus 1 percentage point.” – he assessed.

According to him, it is to be similar in the United States, “the European Central Bank estimates the same.”

Economy in Poland

Glapiński assessed that “the situation on the labor market is very good”. – And when it comes to the economy, we predict the so-called soft landing scenario, i.e. the growth rate GDP will fall close to zero, but we will not have a recession and God forbid an increase in unemployment, although some tensions on the labor market may appear – he said.

In his opinion, “this would be the best – and we anticipate – model for the Polish economy to recover from high inflation.” He indicated that there will be a deep recession in some countries.

As he said, according to the NBP’s projection (the bank will present it on Monday), from the second half of this year “our economy should accelerate as the effects of the negative shocks that occurred two years ago fade away”.

Main photo source: Shutterstock

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