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Interest rates and inflation in Poland. Economists Małgorzata Starczewska-Krzysztoszek and Sławomir Dudek comment

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Who is responsible for the fact that our economy and savings will burn down? The one who started or the one who failed to put out the fire? – Sławomir Dudek, an economist, president and founder of the Institute of Public Finance, and professor at the Warsaw School of Economics, wondered on TVN24, referring to the claims that the Kremlin’s aggressive actions were the only cause of inflation. Małgorzata Starczewska-Krzysztoszek from the University of Warsaw pointed out that there are many households that “are unable to afford basic products”.

Economists referred, among others, to the words of the President of the National Bank of Poland, Adam Glapiński, that there are no high prices. – If Mr. President believes that there are no households, people who are unable to afford basic products, then I am very surprised. We have a lot of low-income households, said Małgorzata Starczewska-Krzysztoszek.

Sławomir Dudek, on the other hand, said that we can be happy “only when we reach the inflation target, and that will be a long way”. – Anyway, the president talked about what will happen in 2032, whether we will jump over France or not (…) and said that these forecasts are almost certain, and at the same time he did not say what will happen with inflation next year, when we unfreeze prices. So he told incredible stories ten years ahead, and did not say what will happen in January 2024 with the increase in prices – he said.

Professor of the Warsaw School of Economics added that “inflation lies” are claims that the sole causes of inflation are the pandemic and Russian aggression in Ukraine. Małgorzata Starczewska-Krzysztoszek. she said, however, that it is worth looking at the data before the appearance of the coronavirus. – Already in the second half of 2019, the process of a stronger price increase began. Of course, it was far from the levels we have this year. However, if I remember correctly, in December it was 3.4 percent. – she said. She stated that “today it sounds abstract”, while in those conditions it was already high inflation. “The rise in prices started much earlier,” she emphasized.

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Interest rates and inflation in Poland. Economists Małgorzata Starczewska-Krzysztoszek and Sławomir Dudek commentTVN24

– You can compare it to a fire. Let’s assume that Putin started this inflationary fire, but also added to it President Glapiński’s late reaction, the government also sets fire to it by spreading these social transfers. However, our firefighters, decision makers, are supposed to put out the fire, and we discuss who set it on fire, and we don’t put it out. It’s burning almost full, and the government is pouring gasoline on the fire. Who is responsible for the fact that our economy and savings will burn down? The one who started or the one who failed to put out the fire? Slawomir Dudek asked.

Interest rates and inflation in Poland

During its May meeting, the Monetary Policy Council decided to hold NBP interest rates at an unchanged level. The decision was announced on Wednesday. This is the eighth meeting in a row when the MPC did not change interest rates. The main reference interest rate has remained at 6.75% since September 8, 2022.

PAP

The next MPC decision-making meeting will be held on 5-6 June.

Read more about Adam Glapiński’s conference: Double-digit core inflation. “We are close or we are on top”>>>

From the preliminary data from the Central Statistical Office shows that in April the increase in the prices of goods and services amounted to 14.7% on an annual basis, while in March it was 16.1%. The market consensus, i.e. the median of analysts’ forecasts, assumed a 15% increase in prices last month. The final inflation data for April will be released next Monday, May 15. The NBP inflation target is 2.5 percent. +/- 1 percentage point

On the other hand core inflation in March 2023 amounted to 12.3 percent.

Main photo source: TVN24



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