The fact that we were dealing with lower than expected interest rates of the Central Bank, in my opinion, shows the awareness of the President of the National Bank of Poland that there is another demon looming on the horizon, which has so far been less talked about, namely the economic slowdown, i.e. the recession – she said in “Faktach po Faktach”, economist Dr. Lidia Adamska. Commenting on the Friday speech by Adam Glapiński, economic analyst Rafał Mundry pointed to “a few small pieces of news for economists”.
– Based on our projection, I do not see a risk of stagflation in Poland, but a significant slowdown in growth – yes – said the NBP president Adam Glapiński during the Friday press conference. – In our report, we predict the possibility of a technical recession, which means that two months, two quarters, several months are below zero – said Glapiński.
His statement was commented on by economists Dr. Lidia Adamska, an expert in the field of financial markets, and Rafał Mundry, an economic analyst, in “Fakty po Faktach”.
Doctor Adamska: another demon is looming on the horizon
– What we heard today does not differ much from the narrative of the previous conferences of the NBP president. For me, these were primarily promises – said Adamska. – I have not heard any justification or explanation why these indicators show, in the intention of the president, the improvement of the situation, why it should happen this way – she said.
In her opinion, “it was a statement that somewhat obscures what is actually happening”. – These optimistic statements and promises, without any rational justification, clash with expectations, the so-called economic consensus. Economists wondered what the Monetary Policy Council would do, what these (interest) rates would be. It turned out that what the Council proposed and what was adopted is below this consensus – said the economist.
On Thursday, the Monetary Policy Council raised NBP interest rates by 50 basis points. The main NBP rate, the reference rate, increased from 6 to 6.5 percent. It was the tenth increase in interest rates in a row.
– The fact that we were dealing with lower than expected interest rates of the Central Bank, in my opinion, shows the CEO’s awareness that there is another demon on the horizon, which has been less talked about so far, namely the economic slowdown, i.e. recession – said Dr. Adamska .
Mundry on a few “fairly important sentences” from Glapinski’s conference
Analyzing the speech of the NBP governor, Rafał Mundry pointed to “a few minor pieces of information new to economists”. – During the conference lasting over an hour, three or four quite important sentences were uttered. Two of them are fairly new, he said.
The first piece of information is that the National Bank of Poland is starting to see very clear first signs of a very clear economic slowdown. And this is quite important information as the NBP will be the first to see this type of data in banks’ balance sheets and financial flows. These NBP concerns about economic growth may be really serious – the expert assessed.
The second key piece of information in his opinion is the news for borrowers that “perhaps the cycle of interest rate increases ended yesterday”. – I think it is a bit of a desire. President Glapiński suggests that the summit inflation will be in August. If inflation starts to fall from then on, or stops rising, yesterday’s hike may have been the last. But many analysts say that we will not see the peak of inflation until late fall, or at the turn of the year, the economist noted.
As he added, the last “surprising” information provided by Glapiński was that we will reach the inflation target outlined by the NBP a year later than previously announced. – The target of the National Bank of Poland is inflation at the level of 2.5 percent at the end of next year. Today, President Glapiński has repeatedly said that we will actually reach the inflation target a year later, i.e. in 2024 – emphasized Mundry. He added that next year this inflation will be with us at a high level.
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