Inflation in Poland is at the highest level since 2001. This is a level far from what the National Bank of Poland, the Monetary Policy Council would like to see, said Adam Glapiński, president of the National Bank of Poland during the Thursday press conference. “This indicator made us very sad,” he added. At the same time, the NBP governor emphasized that the central bank should not react with a rate hike in a situation when inflation is increased by factors beyond the central bank’s control.
A quick estimate prepared by the Central Statistical Office shows that inflation in August 2021 in Poland amounted to 5.4%. year on year and 0.2 percent month on month. The last time inflation was higher in June 2001, when it was 6.2%. In July 2001, the increase in prices in Poland was 5.2 percent.
– We were very sad about this indicator. However, this level is, to a large extent, the effect of factors independent of the monetary policy of the National Bank of Poland, said Adam Glapiński on Thursday.
Inflation in Poland – Adam Glapiński comments
– We have carefully studied the components of this indicator, it comes entirely from factors beyond the control of the NBP’s monetary policy. It is not known how it will be in the future, but in this case, until today, it is only the result of a supply shock (cost increase – ed.), On which we have no influence, unfortunately – stated the president of the central bank.
Glapiński stated that “there is no magic wand with which you can lower the inflation resulting from the increase in the production costs of gasoline of all kinds, all other raw materials, transportation costs from other countries, or food prices due to ASF or other reasons” . – It could only possibly reduce taxes in order to spread the price increases over time – said the President of the National Bank of Poland.
According to Adam Glapiński, the same applies to electricity prices. – The increase in electricity prices results from the so-called energy transformation, from the European Union’s CO2 policy, and from a consciously implemented policy, he said. As he indicated, gas prices have also increased recently, and moreover, the prices of rubbish collection fees have a significant impact on the inflation rate.
At the same time, Glapiński pointed out that “inflation has recently accelerated significantly almost all over the world”.
Interest rates in Poland
According to Adam Glapiński, the central bank should not react with a rate hike to negative supply shocks. – The central bank should not react to negative supply shocks by raising interest rates – he said.
Despite the acceleration in price growth in Poland, the Monetary Policy Council – unlike the central banks in Hungary or the Czech Republic – decided not to raise interest rates on Wednesday.
Glapiński once again assessed that the inflation rise is temporary. – The current price increase in Poland and around the world is temporary. We also have the effect of delayed demand, but the increase in inflation is due to the above-mentioned increase in commodity and freight prices, supply problems. Also from the statistical base effects – he said.
The NBP president said on Thursday that all available forecasts indicate that inflation will drop significantly in 2022.
– Forecasts indicate that inflation will decline next year – all forecasts, not ours, but all available. It will drop significantly. But there will still be an increase in energy prices from the side of factors driving inflation, and gas price increases are also very likely, ie further supply shocks, over which we have no influence – said the NBP governor. – Only the government can influence them in terms of taxes – he added.
Main photo source: Wojciech Olkuśnik / PAP