MPC's Maslowska Expects Inflation To Approach Tolerance Band At End-2025

PAP news wire runs comments from NBP's Gabriela Maslowska, who said that she was "hoping" that 2024 will bring more rate cuts, but the next macroeconomic projection will be key in determining the trajectory of rates.

• Maslowska told Radio Lublin that the latest projection implies that inflation will ease to +5.0% Y/Y in 2024 and approach the upper end of the target range (+3.5% Y/Y) near the end of 2025, assuming that the incoming government keeps the zero VAT rate applied to food items in place.
• The official warned that withdrawing the zero VAT rate on food would boost headline inflation by 0.9pp, while removing the existing cap on energy prices would push inflation 1.6pp higher.
• "At this point, talking about what will happen with interest rates would be very, very irresponsible, premature. We can talk with more confidence (...) only in March, when we get the new inflation projection and we get to know which measures will the new government implement and at what pace."