Interest rates to reach 8.5% at end of year
15:35
GDP and inflation forecasts rather point to a deceleration of the economy. At present, this is hardly visible in Poland, as this GDP rate will be between 6 and 7 percent y/y. In the first quarter it was as high as 8.5 percent. In the second half of the year, however, the economy may slow down to around 2 percent y/y. Inflation, in turn, could reach 15-20 percent. And this 20 percent is becoming quite real because we are already seeing inflation above 15 percent in June. All this means that an economic slowdown and still very high inflation is ahead of us. Price rises are so far advanced and have taken hold of the entire economy that even a slowdown can stop and lower inflation to a small extent.
"We still assume that the target interest rate in Poland is around 8.5 percent. Today it stands at 6 percent. The risk for this scenario is the economic slowdown visible abroad, although not yet in Poland," Rafał Benecki, chief economist at ING Bank Śląski, said.
"We think that the financial market evaluates the anti-inflationary policy of the government and the central bank quite poorly. This will mean that the central bank will have to return to hikes even despite the slowdown," Benecki added.
