Inflation expectation management crucial after pandemic - monetary council

Poland's fiscal policy in the post-pandemic period should focus on managing inflation expectations, a member of the Polish central bank's Monetary Policy Council (RPP) said on Tuesday.

RPP's Lukasz Hardt told a fiscal policy debate at the Polish Economic Institute that the proper management of inflation expectations will be crucial for RPP in its strivings to restore the national economy to its pre-pandemic growth pace.

"As the monetary authority, we ought to concentrate on the successful management of inflation expectations… Poland needs a policy mix that will help the economy return to its pre-pandemic growth path without inflation fluctuations or a rise in the public debt," Hardt said.

Hardt added it was yet unclear whether the present high inflation was a temporary pandemic effect or a more lasting phenomenon. He admitted there were many indications of an inflation drop next year, but warned that many factors could also push it up, and said he knew of no current forecast placing this year's inflation below 3.5 percent.

According to Hardt, among the main inflation-boosting factors were rising wages and low unemployment.