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Wednesday, May 22, 2024

Inflation in Poland. Przemysław Litwiniuk MPC member on Adam Glapiński, the report of the Supreme Audit Office and the activities of the National Bank of Poland

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Inflation in Poland remains at double-digit levels. – The reasons from the banner subside. Now we should deal with the causes of core inflation – said Professor Przemysław Litwiniuk, a member of the Monetary Policy Council (MPC), in TVN24’s “One na 1”. As he indicated, he was personally in favor of continuing the cycle of interest rate increases in 2022.

Przemysław Litwiniuk admitted that the Monetary Policy Council has an analysis: “Measurement of price rigidity based on GUS unit data”, which was written by the money.pl portal. – There is such a document and it shows that in 2019 from the level inflation 1.7 percent we got under 4 percent, and in January 2020 it was 4.3 percent. At that time, there were demands in the Council to slightly tighten the monetary policy – reminded the member of the MPC.

– At that time it was believed – according to the information I have – that these phenomena were temporary. I would consider the monetary policy during the COVID-19 pandemic and the instruments that were implemented with the participation of the National Bank of Poland as the moment of crossing the Rubicon, added the economist. In his opinion, “there was an overestimation of the needs and the involvement of too much funds on the market, which resulted in the de-anchoring of prices.”

Litwiniuk was asked if this topic was discussed during meetings with the president of the National Bank of Poland, Adam Glapiński. – The course of the discussion is classified, but we are talking about current and historical matters, because history is a certain teacher of life, also in the functioning of the National Bank of Poland – said the lecturer at the Institute of Economics and Finance of the Warsaw University of Life Sciences.

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Przemysław Litwiniuk was therefore asked whether Adam Glapiński sprinkles his head with ashes during meetings or whether he presents such a good mood as during the conference. – Mr. Glapiński is a nice and optimistic person when it comes to my impressions. I have never seen him in the attitude known from the history of Canossa – said the guest of “One on One” on TVN24.

Przemysław Litwiniuk on the Monetary Policy Council

The economist also spoke about working conditions at the Monetary Policy Council. – Our greatest achievement from last year – I am talking about those Council members who called for changes in the area of ​​functioning of the MPC – was the return to two-day meetings. Current work is still conditioned by the consents of the Director of the General Department – he pointed out.

Litwiniuk admitted that this means that he must obtain permission to contact analysts. – I don’t think it’s a sensible solution, but it’s the way it is. It is the president (NBP Adam Glapiński – ed.) and the management board who manage the bank, not the Monetary Policy Council – explained the MPC member.

The guest of “One on One” was asked how he should perform his duties, since he does not have free access to analyzes and analysts. – It is more difficult, but possible. These are technicalities, they do not determine the directions of Polish monetary policy. The most important thing is that I have the whole day to discuss my analysis of the documents with the so-called staff, i.e. experts from the National Bank of Poland, on the first day of the meeting, and this is an achievement that should be appreciated – he replied.

NIK about the activities of the National Bank of Poland

Litwiniuk was also asked about the results of the audit of the Supreme Audit Office, which at the beginning of June this year. sent to the Sejm: “Analysis of the implementation of the state budget and monetary policy assumptions in 2022 and an opinion on the discharge for the Council of Ministers”. We read in it, that: “inflation at a high level was also influenced by domestic factors, which could be influenced by the National Bank of Poland through monetary policy instruments”. “This was evidenced, among others, by the growing core inflation rates throughout the year, which were significantly above the inflation target” – noted NIK.

– The fact that inflation was not kept at the target is obvious – commented Przemysław Litwiniuk.

At the same time, he referred to the banner that in mid-May this year. hung on the building of the National Bank of Poland. The banner read: “Burning the NBP and the government for high inflation is the Kremlin’s narrative.” Two “main causes of inflation” were also listed: Russian aggression in Ukraineas well as the pandemic “and its effects”.

Inflation banner on the NBP building Konrad Piasecki, TVN24

– The reasons from the banner subside. Now we should deal with the causes of core inflation, because the banner ones are already to be erased – emphasized the TVN24 guest. – I think that more interesting information could be displayed there (on the banner – ed.) – assessed Litwiniuk, but as he added, he is not a marketing specialist.

The economist recalled that he was personally in favor of continuing the cycle interest rate increases in 2022. – (…) Supreme Chamber of Control illustrates the state of affairs here – indeed, inflation significantly deviated from the target, and the measures that were applied were suspended in September 2022 – he pointed out.

At the same time, he has doubts about the recommendations included in the NIK analysis. – The entire catalog of recommendations contained therein raises doubts as to whether the Supreme Audit Office may issue instructions to an independent central bank on how to proceed – said Przemysław Litwiniuk.

PAP/Maciej Zielinski

Main photo source: Konrad Piasecki, TVN24



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