Adam Glapiński made the prediction at a news conference in Warsaw on Thursday, Polish state news agency PAP reported.
He met the media after the central bank's rate-setting Monetary Policy Council left interest rates unchanged on Wednesday, keeping the reference rate at 6.75 percent.
'We are seeking to make inflation fall gradually, not abruptly'
Glapiński, who heads the National Bank of Poland (NBP), said: “We are seeking to make inflation fall gradually, not abruptly.”
He added: “If we sought to return to the inflation target too quickly, we would have caused an economic recession, with all its negative consequences, including unemployment. We need to act prudently.”
Glapiński told reporters that inflation could rise further in the coming months “due to commodity and energy shocks and the likely scrapping of some of the Polish government’s anti-inflation measures.”
He added: “Obviously, the war in Ukraine remains the main driver of uncertainty.”
Glapiński said that the Monetary Policy Council's decision to keep key interest rates unchanged in November was “optimal,” but added that "if the economic situation changes, our decisions may be different.”
He also said that the tightening cycle “has been suspended, but not completed.”
Inflation to peak at 19 percent in Q1 2023
Glapiński told reporters: “We expect inflation to peak in January or February 2023 and then start to fall from March onwards.”
He said inflation was likely to peak at 19 percent before dropping to 8 percent in the last quarter of 2023 and “reaching the NBP target rate in 2025.”
The Polish central bank’s target inflation rate sits in the middle of a range from 1.5 percent to 3.5 percent, the PAP news agency reported.
The NBP’s rate-setting panel in recent months delivered a string of rate hikes in an effort to contain surging consumer prices.
The Monetary Policy Council in September raised key interest rates for the 11th consecutive time in a bid to tame inflation.
The reference rate at the time went up by 25 basis points to 6.75 percent, from 6.50 percent, amid rising inflation.
Inflation in Poland hit 17.9 percent last month, according to a flash estimate by the country’s statistics office.
(pm/gs)
Source: IAR, PAP, tvp.info