01 Nov 2022
Poland’s inflation reached 17.9% year-on-year in October amid skyrocketing energy prices, according to initial data published on Monday.
With inflation soaring across Europe, policymakers are looking to avoid further increasing borrowing costs as consumers rein in their spending and businesses struggle.
Central bank governor, Adam Glapinski said last month that the bank hasn’t yet ended its tightening plans that have increased the base rate to 6.75% from close to zero over the last year, Reuters reports.
Glapinski said that the bank’s new inflation forecasts in November would be crucial in determining if further hikes were required.
Yet as wage growth is still robust in Poland, inflation will remain higher for longer, according to analysts.
“The inflationary environment remains unfavourable, and it is difficult to expect a change in trend,” said Grzegorz Maliszewski, chief economist at Bank Millennium.
“Data shows that there is room for interest rates to rise, but it is difficult to say whether this will be the case at the upcoming meeting, as it seems that many members of the Council want to assess the effects of the measures taken so far and perhaps... rates will stay unchanged.”
Last month’s data followed another rise in September, which was echoed in other countries around the region.
Indeed, headline inflation in Hungary is above 20%, although the central bank held the main interest rate the same last week whilst sticking with measures to bolster the Forint after plummeting to all-time lows.
Also, Czech inflation is currently at 18%, but rates haven’t been adjusted since June, the Reuters report adds. Yet the central bank has also continued to intervene to prevent the Koruna from excessive weakening.