Monetary policy outline sees gradual CPI decrease in 2023 and 2024

According to the National Bank of Poland's 2024 "Monetary Policy Assumptions," inflation is expected to continue decreasing in the second half of 2023 and beyond. This trend is attributed to prior strong monetary tightening and a credit slowdown. Weakened economic demand, falling cost pressures, and global inflation reductions will contribute to a gradual decline in core inflation.

The report also highlights the waning impact of past global supply shocks on domestic food and energy prices. However, a slow and gradual return of inflation to the NBP's target is anticipated due to the magnitude and duration of these shocks, which were beyond domestic monetary policy's control.

While Poland may see increased economic activity in late 2023, GDP growth is projected to remain below the long-term average until 2025. This is influenced by factors like nominal wage growth, declining inflation, and enhanced childcare benefits. Conversely, constraints on GDP recovery include slow foreign GDP growth and the conclusion of EU funds from the 2014-2020 perspective, which may reduce investment and net export contributions to GDP.

Source: strefainwestorow.pl