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Interest rates and inflation in Poland. Ryszard Petru and Jakub Borowski comment in “Fakty po Faktach”

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The average Pole loses PLN 260 a month. Inflation eats away at his salary and it will continue to do so in the coming months, said Ryszard Petru, an economist at the Institute of Liberal Thought, in the “Fakty po Faktach” program on TVN24. On the other hand, the chief economist of Credit Agricole, professor at the Warsaw School of Economics, Jakub Borowski, PhD, predicted that the peak of inflation would take place in February.

The Monetary Policy Council did not change anything at the two-day meeting ending on Wednesday interest rates. The main NBP rate, the reference rate, remained at 6.75%. On Thursday we will get preliminary data on inflation for December 2022.

Petru: wages in Poland grow slower than inflation

According to Ryszard Petru, “the Monetary Policy Council has abdicated”. – She accepts a very high level of inflation. Inflation in Dec Spain amounted to 5.8 percent, in France 5.9 percent According to the NBP forecast, we will have such a level of inflation in the second half of 2024. Let me repeat: in two years we will have inflation as low as in France or Spain, he said.

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– Wages in Poland grow slower than inflation. Inflation 17.5%, wages 14%. That’s a 3.5 percentage point difference. This means that the average Pole loses PLN 260 a month. Inflation eats it out of his salary and will continue to do so in the coming months, he said.

– We have a very strong slowdown in growth, reduced economic activity, less investment, no KPO. All this means that wages will not grow quickly. So every Pole will lose relatively. The Monetary Policy Council and the president of the National Bank of Poland have a goal to keep inflation at a low level. Sometimes there is a shock, as was the case, but they should quickly bring it to a socially acceptable level, between 3.5% and 1.5%. said Petr.

Borowski: this is not the end of inflation growth

Dr. Jakub Borowski reminded that Credit Agricole had forecast that the inflation level in December would amount to 17.3 percent. – This is not the end of the increase in inflation. This peak will most likely be in February. What has been happening recently, i.e. stabilization fuel prices (…) this is a factor that signals that the probability that we will exceed 20 percent. inflation (…) it has fallen – said the economist.

– An increase in real wages, and it is important, because then we can increase consumer spending – it’s only the second half of the year. Wages that are still speeding up will meet lower inflation, but only in the second half of the year – predicted Jakub Borowski.

Main photo source: TVN24

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