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  • This week, Polish government proposed a 7.1% hike in minimum wage for 2022, slightly less than the previous hike of 7.7% announced last year for 2021 that brought the minimum wage up to 53.2% of the average wage in Poland. This proposition will now have to be approved by Council for Social Dialogue, comprising the government, employers and trade unions.
  • With Core CPI rising to 4% in May and Final CPI print coming in at 4.7%, both key measures of inflation are now standing significantly higher than the 3.5% NBP upper tolerance band.
  • While some policymakers continue to think that the spike in inflation is just temporary and that inflationary pressures should ease in the end of 2021 / beginning of 2022, some more 'hawkish' MPC members are favoring a 'symbolic' rate rise in the short term.
  • This week, 'dovish' MPC member Gatnar repeated on TV Biznes24 that a 'symbolic' rate rise is needed as it is still not clear if the polish spike is temporary. Gatnar sees CPI inflation at 5% in June and confirmed that polish fiscal expansion will 'simulate inflation'.
  • MPC member Hardy also commented on TOK FM that polish interest rates should be 'gently normalized' right now as CPI inflation may remain elevated for longer than expected if NBP does not act.
  • The PLN weakness in June, with traders taking profit following strong momentum in April and May, has been weighing on Polish equities (WIG20), which have retraced lower in the past week towards their 2,200 support.