The Monetary Policy Council (MPC) has raised interest rates twice and will continue to act if necessary to prevent the persistence of elevated inflation – said Adam Glapiński, president of the National Bank of Poland in an interview for Gazeta Bankowa.
The next MPC decision-making meeting is scheduled for Wednesday, 8 December. The benchmark interest rate – as a result of two increases – rose by a total of 115 basis points to 1.25 percent.
– We raised interest rates twice and we will continue if necessary. Just as we were determined to save the Polish economy during the pandemic, we will not allow heightened inflation to persist. Of course, while ensuring sustainable growth in the economy – said Adam Glapiński.
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Inflation in Poland
– It should be remembered that inflation will remain elevated until the first quarter of 2022, because – as I said – it is currently being boosted by increases in fuel and raw materials prices in the world, a boom in gas prices in Europe, the effects of the EU climate policy affecting electricity prices and other factors. However, our actions will prevent these shocks from increasing inflation permanently. As a result, after a few quarters it will start to decline – he added.
The Central Statistical Office announced last week that the Consumer Price Index (CPI) in October was 6.8 percent year on year. This is a level not seen since May 2001, when inflation was 6.9 percent year on year. Preliminary data for November – according to the CSO website – will be released next Tuesday, November 30.
The November projection prepared by the National Bank of Poland shows that inflation this year will amount to 4.9 percent, 5.8 percent in 2022 and 3.6 percent in 2023.
NBP profit for the army
In an interview with the newspaper, the NBP president also positively commented on the plan of transferring a contribution from the NBP profit to the Armed Forces Support Fund, the establishment of which was recently announced by the government.
– The planned transfer of the contribution from the NBP profit to the Armed Forces Support Fund is, in my opinion, completely correct and I am very happy. The profit of the central bank is the income obtained mainly from the management of the NBP reserves, which are national assets, while national defense is one of the most important functions of the state – he stressed.
Main photo source: PAP / Wojciech Olkuśnik