High inflation may stay for years, MinFin economist warns

High inflation in Poland may persist for up to three-four years before it is brought back to the central bank's official target of 2.5 percent, the chief economist at the Finance Ministry has warned.

Poland has been suffering from increased inflation after the National Bank of Poland (NBP) lowered interest rates to record low levels when the coronavirus pandemic struck in the spring of 2020. The official reading for September was 5.9 percent, more than double the NBP's official target of 2.5 percent.

Lukasz Czernicki told the private radio broadcaster TOK FM that the unusually high inflation was here to stay for "several or even a dozen or so quarters."

"A few months ago we forecast 3.3 percent inflation for next year, but probably this will be a bit higher."

"The inflation is elevated, has accelerated to nearly 6 percent, certainly it poses some macroeconomic risk, but according to our estimates such a high inflation rate is a transitory phenomenon," Czernicki said.

"Next year inflation should start to gradually go down," he went on to say.

Czernicki admitted the inflation was helping the state budget.

"It may be assumed that higher inflation translates into better financial stability for the government," Czernicki said.

In early October, the central bank raised the main interest rate to 0.5 percent from 0.1 percent, but economists say the move was too moderate to have any real effect on inflation.