Rapid decline in inflation will continue says central bank governor

Adam Glapiński, the governor of the National Bank of Poland (NBP), has said that inflation is falling, as predicted in forecasts, and that this process will continue.

"As we predicted in the projection, inflation is definitely falling," Glapiński confirmed during a press conference on Wednesday, a day after the NBP's Monetary Policy Council decided to keep all interest rates unchanged for the ninth month in a row.

He added that "the rapid process of falling inflation, including core inflation, will continue."

Inflation hit 18.4 percent in February before starting to slide. In May it was already down to 13 percent, which was the lowest level in a year.

Glapiński pointed out that "the fall in the inflation rate by more than 5 percentage points within five months is a completely unique pace."

The NBP governor said that there was no need for further rate hikes when inflation was falling.

"Keeping the (reference - PAP) interest rate at 6.75 percent continues to affect the economy and will continue to do so in the coming quarters," said Glapiński. "It would be irresponsible to push for further increases in interest rates when inflation is falling. It would lead to economic turmoil and a deepening of the recession."

Glapiński said that in May - for the first time "in a long time" - prices did not change compared to April, adding that in May core inflation dropped for a second time, although it was the first time it had fallen "so clearly."

The core inflation dropped to 12.2 percent in April from 12.3 percent in March.

The Consumer price index (CPI) increased by 13 percent year on year in May on no monthly change after a 14.7-percent annual increase in April.