Inflation may fall below 6 pct by year's end says PM
Mateusz Morawiecki, the Polish prime minister, has said that inflation could fall below the level of 6 percent at the end of the year.
In a flash estimate published on Friday, the Central Statistical Office (GUS) reported that the prices of consumer goods and services (Consumer Price Index, CPI) increased by 8.2 percent year on year and fell by 0.4 percent month on month in September 2023. This was a slower pace of inflation compared to August, when the CPI reached 10.1 percent year on year.
Morawiecki, commenting on the data said in an interview with the private television station Polsat News on Friday said that he was not surprised by the scale of the decline in the CPI.
"I believe that after this very good reading, it could go below 6 percent," he said. "It may be around 5 percent in just a few months, which means it will return to normal very quickly."
When asked what he thought should happen to interest rates, Morawiecki replied: "If inflation is falling at such a pace, then it's not my place to comment on and direct monetary policy, as this is the exclusive area of the National Bank of Poland (the central bank – PAP), but I suspect that interest rates will continue to fall as will loan rates."
NBP surprised the markets in September by applying a 75-basis-point cut to Poland's interest rates, which set the reference rate at 6 percent.
Despite the recent fall, Poland's inflation is still nearly four times above the central bank's official target of 2.5 percent plus/minus one percentage point. Economists warn that after a relatively quick decline in recent months, inflation may stay elevated for a longer period of time.