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Saturday, February 24, 2024

Inflation in Poland. Professor Joanna Tyrowicz from the MPC on the inflation target. When will Poland reach its inflation target?

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Inflation in April amounted to 14.7 percent year on year, the Central Statistical Office reported. Professor Joanna Tyrowicz, an economist and member of the Monetary Policy Council, referred to these data in “Fakty po Faktach”. – We have a very high price increase in 2022, so we should expect a lower price increase in 2023. Once prices have increased by ten percent, next year an increase by the same amount of zlotys will not be ten percent. Inflation readings in 2023 will be lower, she explained.

Inflation in April 2023 amounted to 14.7 percent, year-on-year, according to preliminary data data from the Central Statistical Office (Central Statistical Office). Compared to the previous month, prices went up by 0.7 percent. In March, the increase in the prices of goods and services amounted to 16.1 percent on an annualized basis.

The guest of Saturday’s “Fakty po Faktach” was Professor Joanna Tyrowicz, economist, member of the Monetary Policy Council (RPP). She explained, among other things, how these data should be understood.

Tyrowicz: today there is no disinflation that everyone expects

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– We have a very high price increase in 2022, so you should expect a lower price increase [w roku 2023 – przyp. red.]. This is technically called the “base effect”. Once prices have increased by ten percent, next year an increase by the same amount of zlotys will not be ten percent. (…) Readings inflation in 2023 will be lower – said the economist.

However, she noted that “this does not mean that inflation is returning to the inflation target” of 2.5 percent. “There’s no way we’re going to hit the inflation target this year, there’s a very small chance we’re going to hit it next year,” she said. – For today, there is no disinflation that everyone expects – she added.

Joanna Tyrowicz in “Fakty po Faktach”TVN24

At the same time, the economist admitted that “the pace of price growth will be slower” thanks to the fall in inflation in other countries of our region. A positive factor may also be the strengthening of the zloty, resulting in more favorable import conditions, as well as a decline fuel prices and food.

Tyrowicz: raising interest rates would be beneficial for the economy

Joanna Tyrowicz assessed that “it would be clearly better for the economy” if the Monetary Policy Council decided to an increase in interest rates. – Our economy is not in recession, (…) therefore further monetary policy tightening, especially if accompanied by fiscal policy tightening, would shorten the period when we have very high inflation – she said.

– An unequivocal increase in interest rates would ease and shorten this process – said the economist, declaring that she votes in favor of raising them at MPC meetings. – A longer episode of inflation means that loan installments will be higher for a longer period of time. In a sense, the choice is a shorter time a little more expensive versus a very long time as expensive as it is now – she added.

Main photo source: TVN24



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