The world’s first increase in card prices for 2022 in Poland

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(Bloomberg) – Poland is likely to organize the first increase in interest rates in the world this year, intensifying the fight against inflation, which should reach the highest point in this century.

After the central bank sharply raised its inflation forecasts for 2022, it is expected to raise the reference rate by 50 basis points to 2.25 percent on Tuesday, according to 15 of the 17 economists polled by Bloomberg. The other two expect an increase of 75 basis points.

After tripling borrowing costs in the last three meetings, the Monetary Policy Council is still struggling to catch up with its regional counterparts Hungary and the Czech Republic, where policymakers have launched Europe’s most aggressive campaigns to curb spiraling prices. Polish Governor Adam Glapinski said last week that inflation would peak above 8% in June and said more increases were needed.


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“The council will increase by 50 basis points,” said Piotr Poplawski, an economist at ING Bank Slaski, citing rising inflation expectations and the growing risk of a wage and price spiral. “These factors threaten to return inflation to the upper range of inflation targeting at the end of 2023.”

Glapinski will hold a press conference on Wednesday at 3 pm to discuss the decision.

The jump in inflation is caused by soaring natural gas and energy prices, a factor that is expected to persist into 2022. This will continue to pose challenges for the MOC, which will undergo major reconstruction as almost all its members will be replaced by the end of March.

Tuesday’s meeting will be the last for rate-setters Jerzy Kropiwnicki and Eugeniusz Gatnar before being replaced by the Senate. The chamber is ready to vote next week for former Deputy Finance Minister Ludwik Kotecki and economics professors Przemyslaw Litwiniuk and Joanna Tyrowicz in a 10-member panel.


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All three were in favor of higher interest rates, while Gatnar said last week that “an increase of 50 basis points would be appropriate” if forecasts are confirmed on Friday that inflation will exceed 8% in December. In November, consumer price inflation rose to 7.8%, the highest since December 2000.

Another concern is the ongoing pandemic and its potential to undermine economic growth, a major factor in the central bank’s previous reluctance to tighten policy this year. The government reintroduced some restrictions on social distancing, but waived complete isolation protocols.

“The expected increase in interest rates could be even higher, but the risk of increased infections due to the omicron variant remains high,” said Poplawski of ING.

© 2022 Bloomberg LP



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