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We’ll do all it takes to tame inflation: Polish central bank chief

17.02.2022 13:30
Poland’s central bank will do all it takes to ensure a lasting reduction in inflation, its chief was quoted as saying on Thursday. 
Polands central bank chief Adam Glapiński.
Poland's central bank chief Adam Glapiński.PAP/Tomasz Gzell

Speaking in an interview with the Super Express tabloid, Adam Glapiński said that “in January, inflation reached 9.2 percent in Poland, which is high indeed, but lower than the Czech figure of 9.9 percent, for example."

He added: “Thanks to the introduction of an anti-inflation package by the government, inflation will fall by July this year, while these measures and their impact on inflation may be extended.”

Glapiński predicted that the consumer price index would remain above the Polish central bank’s target throughout 2022, the state PAP news agency reported.   

“Our decisions are geared towards ensuring inflation falls to the target level in the medium term,” Glapiński said, adding that “the time horizon for inflation‘s return to the central bank's target depends on many factors, largely external ones.”

Glapiński announced that his National Bank of Poland (NBP) would next month issue its inflation and GDP forecasts for the country until 2024. 

‘Suppressing inflation is key’

Asked if a string of interest rate increases in Poland could hamper economic growth and lead to an increase in unemployment, Glapiński said the country could expect to "experience a strong upturn in economic activity.”

He noted that, according to the state-run Central Statistical Office, Poland's GDP grew by 5.7 percent in 2021 and 7.3 percent in the last quarter of last year.

“The jobless rate is low and the supply of jobs is growing," Glapiński also said.

He added: "And so by raising interest rates, we won’t cause a radical increase in unemployment, but rather we’ll prevent excessive wage pressure. This in turn will notably reduce the risk that monetary tightening will produce social costs."

Glapiński further argued that "monetary tightening is necessary because it will contribute to a lasting reduction in inflation in the medium term."

He concluded: “This last objective is key for ensuring a favourable outlook for the Polish economy, including for the financial situation of Polish families and businesses.”

Glapiński ruled out freezing the interbank WIBOR rate, which influences the cost of mortgage loans, the PAP news agency reported.

He said such a move would amount to “interference in private legal relations, something unacceptable in the modern market economy."

He added: “Freezing the WIBOR rate would also undermine the principles of the financial market. As a result, confidence in the proper functioning of the legal system and the market economy would be undermined."

Glapiński earlier this month told reporters than inflation in Poland should drop to around 5 percent in 2023.

Poland's President Andrzej Duda at the end of last month asked parliament to reappoint Glapiński as central bank chief for another six-year term.

Glapiński's term as governor of the National Bank of Poland ends on June 21. His reappointment is subject to approval by parliament.


Source: PAP