MNI NBP WATCH: Policy Hold As Data Shows Inflation Persisting
MNI (LONDON) - The National Bank of Poland is expected to hold key interest rates for an 11th successive meeting on Wednesday, after inflation edged up again in September, with the reference rate seen sticking at 5.75% for the remainder of the year. (See MNI EM INTERVIEW: NBP Likely To Hold Rates In 2024 - Dabrowski)
Consumer prices rose 0.1% monthly and 4.9% in annual terms in September, according to flash estimates, with core inflation also seen increasing to around 4% from last month’s 3.7%. Year-on-year CPI inflation was 4.3% in August, 4.2% in July and 2.6% in June.
NBP governor Adam Glapinski is likely to stress that while Poland’s economy continues to grow at a faster rate than many of its European neighbours, weakened economic conditions and lower inflation pressure abroad continue to limit external inflationary pressures. On the domestic front, wages and service prices continue to grow.
Inflation is still expected to bump along close to 5% for the rest of year, buoyed by base effects and with future fiscal and regulatory policy measures - notably the extent to which households are shielded from high energy prices - likely to determine whether it rises further in Q1 2025.
Glapinski is unlikely to backtrack on last month’s assertion that discussion of rate cuts should start once inflation has stabilised. November’s macroeconomic projections will provide some insight as to how early in 2025 that point may be reached.