According to the European Commission’s forecasts, next year we will grow three times faster than Germany – says Prof. in an interview with DoRzeczy.pl. Zbigniew Krysiak, economist at the Warsaw School of Economics.
DoRzeczy.pl: Professor, interest rates remain at the same level after two cuts. The opposition claims that the Monetary Policy Council could change its strategy due to the threat of PiS being removed from power. Can this really be the case?
Prof. Zbigniew Krysiak: There’s no doubt about it. This body consists of an excellent group of experts, supported throughout the analytical system by several hundred people from the National Bank of Poland. This is a substantive decision resulting from the need to observe what will happen next with inflation.
And what happens to inflation?
For seven months, prices do not rise in subsequent months. We have deviations of plus/minus 0.2 percentage points. If this continues, we can expect annualized inflation of 3 to 4 percentage points within five months. Of course, if this trend continues. If the future government raises energy prices next year, we will get a boost to inflation, so we will have to wait another month or two for the trend to consolidate.
For now, year-on-year inflation is around 8 percent, which is low. However, if we have a PO government and it fails to stabilize energy prices, there may be a risk of a rise in inflation. Then the Monetary Policy Council, which cut rates too early, would have to start raising them again. Leaving rates at this level is a reasonable action and takes into account potential events that may arise. In this situation, waiting is a very rational approach.
What does our economy look like compared to Europe?
The Polish economy is doing great compared to what it is like in Europe. Not only are we talking about unemployment, but we also have one of the highest GDP growth rates; next year, according to the European Commission’s forecasts, we will grow three times faster than Germany. These instruments and stabilizers developed by Prime Minister Morawiecki’s government have created an economy that is resilient to external shocks. If we maintain the structure of this model, focusing on investments, for example the Central Communications Port, roads, railways, energy transformation, which is necessary for the investment. These investments require national vehicles, the multi-energy company must be in Polish hands. If we give up, we will go backwards from the perspective of the size of investments.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
