Inflation in 2021 may be higher than expected in projection: MPC
01:53
During the meeting of the Monetary Policy Council (MPC) on November 6 this year, some MPC members assessed that inflation in 2021 may be higher than expected in the November projection, according to minutes from this meeting, published by the National Bank of Poland (NBP).
"Those members argued that the growth of prices could be boosted – apart from the rise in administered prices – by a faster rise in prices of services. At the same time, they argued that a rise in the minimum wage could also contribute to higher inflation, which may also translate into an adjustment in the wages of those earning more than the minimum wage. salary," the minutes read.
Certain Council members were also of the opinion that due to the possible faster rise in prices of capital goods than in consumer prices, the GDP deflator may be higher than CPI inflation, the central bank reported. However, most of the MPC members expect that – in line with the November projection of the NBP – inflation in the next year will decline and over the projection horizon it will remain in line with the NBP's inflation target.
The central path of the November projection of the National Bank of Poland shows that consumer inflation will amount to 3.4 percent in 2020, then it will slow down to 2.6 percent y/y in 2021 and will amount to 2.7 percent in 2022. The GDP decline will reach 3,5 percent this year, and then Poland will achieve economic growth of 3.1 percent in 2021 and 5.7 percent in 2022. In the years 2021-2022, the dynamics of potential GDP will accelerate, although it will still be below the average of the years 2010-2019.
(ISBnews)
