Wnorowski Reiterates That New Fiscal Measures Could Boost Inflation, But Plays Down Scale

NBP's Henryk Wnorowski told Radio Bialystok that the PLN24bn earmarked by the government for boosting its flagship child benefit programme is "a noticeable amount and we can expect a slight inflationary impulse," but quickly added caveats to this assessment. The policymaker noted that "this current inflation in Poland is primarily a cost-push inflation. Meanwhile, additional money in the society stimulates demand."

• Wnorowski said that he "believes" Prime Minister Mateusz Morawiecki when he says that Poland can afford additional fiscal stimulus. He also played down the inflationary potential of new measures, stressing that the child benefit scheme will be boosted from next year, when inflation will not be such a burning issue.
• This falls in line with Wnorowski's earlier comments for local media. Earlier this week, he told TVP Bialystok that increased pay-outs from the "Family 500 plus" scheme will stimulate inflation, but he did not see this as particularly concerning. He later told Radio Maryja that declining consumption is a "good sign" for disinflation.
• Speaking in TOK FM radio yesterday, head of state development fund PFR Pawel Borys suggested that boosting child benefit payments could raise the inflation outlook for 2024 by 0.2-0.3pp, but is unlikely to have a major impact on the wider inflation trend or monetary policy.