Poland's largest bank releases its latest inflation forecast
19:44
Poland's inflation will soon peak at 16 percent y/y, and the Monetary Policy Council will raise interest rates to 7 percent in response. These are the latest forecasts by PKO BP economists. Experts warn that the double-digit inflation will stay with us longer.
A decline in CPI inflation to below 10 percent on an annual basis is not likely until the end of next year, according to PKO BP analysts in their latest macroeconomic forecast. Even extending the Anti-Inflation Shield until the end of 2022 will not help much – the impact of the Russian invasion and various economic shocks on the economy is too significant.
"The strongly pro-inflationary effects of Russian aggression drive inflation forecasts for 2022-2023. Due to the strong inertia of price processes, a decline in CPI inflation to a single-digit level is likely only at the end of 2023, even assuming an extension of the Anti-Inflation Shield," PKO BP stated.
The Bank assumes that the most likely scenario is that the Shield will remain in place until the end of the year. According to current arrangements, the Shield is supposed to operate until October.
