Economists critical of interest rate hike, but NBP head warns of another

The majority of economists, bankers and business people think the Monetary Policy Council's (RPP) decision to raise interest rates by 1.5 points was unwise. Presidential economic adviser Marek Belka used an old Polish metaphor to describe the situation. "The hike will help inflation like incense can help the dead." Belka said the RPP knew the causes of inflation lay outside its control. Economy Minister Janusz Steinhoff also said the hike will do little to curb inflation and this is why the government opposed the decision. National Bank of Poland (NBP) president Hanna Gronkiewicz-Waltz said if the government does not undertake radical anti-inflationary measures, the central bank will raise interest rates again. Belka, meanwhile, said the NBP's decision shows there is lack of coordination of economic policies between the government and NBP. (Gazeta Wyborcza, page 28, Prawo i Gospodarka, page 1)