Inflation may fall next year says minister

Artur Sobon told PAP on Wednesday that the 2023 budget is based on an average annual CPI (Consumer Price Index) assumption of nearly 10 percent but "forecasting is extremely difficult in these conditions." Piotr Nowak/PAP

Poland's inflation rate is likely to fall in 2023, a deputy finance minister has said.

Artur Sobon told PAP on Wednesday that the 2023 budget is based on an average annual CPI (Consumer Price Index) assumption of nearly 10 percent but "forecasting is extremely difficult in these conditions."

He said that some factors, such as an escalation of the war in Ukraine or "some situations" on the energy market, could be "growth impulses" for inflation.

However, Sobon added, "there is consensus among economists... that next year inflation will fall and all signs in heaven and on earth indicate this."

He also said that funds for supporting people most affected by high inflation constitute "an important part of next year's budget."

"These are all shield solutions - anti-inflation shield, anti-Putin shield, solidarity shield, various allowances and tax cuts," Sobon said.

Under a budget bill approved by the government for 2023, revenues are expected to reach PLN 604.7 billion (EUR 125.7 billion) and spending is planned not to exceed PLN 672.7 billion (EUR 139.8 billion). Poland's budget deficit is likely to come to PLN 68 billion (EUR 14.2 billion). The 2023 budget is based on an expected GDP growth rate of 1.7 percent and an average annual CPI forecast of 9.8 percent.