Next week, the Monetary Policy Council may raise interest rates by more than 50 basis points (ie 0.5 percentage points) due to rising inflation and a weak zloty, analysts at the Goldman Sachs investment bank predict.
As Goldman Sachs (GS) reported on Tuesday, due to Tuesday’s publication of preliminary inflation data in November, the bank’s economists expect inflation to continue to rise in December. “It is possible that it will exceed the level of 8% y / y” – it was noted.
Interest rates – Goldman Sachs predictions
It was indicated that Tuesday’s reading also prompts Goldman Sachs analysts to say that “during next week’s MPC meeting there may be a stronger rate hike as compared to the GS scenario assuming 50 bp”.
In the opinion of the bank, this would be supported by “rising inflation and weak zloty”. On the other hand, the deteriorating pandemic situation may act against the tightening of the monetary policy – added.
The MPC may “surprise” with the scale of the interest rate hike
According to the chief economist of Credit Agricole Jakub Borowski GDP data, and also the inflation data released on Tuesday by the Central Statistical Office indicate a high probability of continuation of the interest rate hikes cycle at the December meeting of the Monetary Policy Council.
Grzegorz Ogonek from Santander Bank Polska has a similar opinion. “The reading may be a pretext for the MPC to surprise again with the scale of the interest rate hike in December, especially that so far the Council has reacted to the current data surprises. Moreover, the latest inflation projection indicated that the inflation peak would be slightly above 7%. in the first quarter of 2022, so the latest data calls for a reaction, the more so as the GDP reading was also strong “- he wrote in the commentary to the data on price increases.
“The decision problem of the Monetary Policy Council has become a bit complicated in the coming months, but it seems that this November reading (Inflation – ed.) Will outweigh the scales and the MPC will raise interest rates by 75 bp in December, and then reactions will be lower in scale, 25 bp and less frequent “- assessed Piotr Bartkiewicz from Bank Pekao.
Inflation in Poland
Central Statistical Office (GUS) said Tuesday in a respectful flashthat the prices of consumer goods and services in November increased by 7.7%. y / y, and compared to the previous month, prices increased by 1.0 percent.
On Tuesday, Prime Minister Mateusz Morawiecki announced that the government adopted the bill assuming the abolition of the excise duty on electricity and the reduction of the VAT rate on natural gas and the maximum reduction in the excise duty on fuel.
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