15:09 17 March 2025
Economist Joanna Tyrowicz: there is no room for rate cuts due to wage dynamics
Professor Joanna Tyrowicz, economist and Monetary Policy Council (RPP) member, believes interest rate cuts are unlikely due to high wage growth, which remains well above the long-term average.
According to the latest NBP inflation projection, inflation will stay elevated through 2025-2026, reaching 2.5% in late 2025, but full stabilization may not occur until 2027. The projection assumes interest rates remain at 5.75% until the end of 2027.
Tyrowicz acknowledges that high rates make credit expensive, but insists they are necessary to control inflation. While some policymakers call for rate cuts to ease borrowing costs, she argues that inflationary pressures from wages and domestic demand remain too strong.
Fiscal policy has also been expansive, delaying disinflation. Tyrowicz warns that unless economic imbalances ease, the RPP will not have room for rate cuts.
(pb.pl)
