Consumer inflation will be 5.5%. y/y at the end of 2024 (compared to 6.6% in November 2023), and the base rate will fall by 50 basis points at the end of the initial year (compared to 5.75% at the end of 2023), according to forecasts prepared for Business Insider Polska through 14 analytical centers: commercial banks, think tanks and business organizations.
“Economists predict that inflation will reach 5.5% annualized by the end of 2024. This would mean that it would be approximately 1 percentage point lower than in December last year. However, there are forecasts among pessimists that indicate that at the end of this year we may see higher price dynamics. mBank analysts believe inflation could exceed 8% in December. Kamil Sobolewski, chief economist at Employers of Poland, predicts it will be 7.5%. – we read in the article.
Experts expect inflation to fall definitively to the central bank’s target (2.5% +/-1 percentage point) in 2026, although some analysts think this could happen in the second half of 2025.
Economists point out that the main element that makes predicting inflation difficult is the government’s unfamiliar approach to VAT on food or protective measures to protect against increases in the prices of electricity, natural gas or district heating, as also indicated in the material.
What will the National Bank of Poland do?
“Today the key interest rate is 5.75 percent, but over the past two months there has been no will to further reduce the cost of money. NBP President Adam Glapiński said there is too much uncertainty regarding energy price freezes, VAT on food or what the new government’s fiscal policy will look like, so the Monetary Policy Council should monitor the situation and take no action. However, economists polled by Business Insider Polska are confident that the central bank will return to easing monetary policy this year. year, and the key NBP rate will fall to 5.25 percent at the end of 2024 – we read on.
According to most analysts, the Monetary Policy Council (MPC) will not decide on cuts in the first half of the year, but after the holidays.
Cezary Kochalski, member of the Monetary Policy Council (MPC), said in an interview with ISBnews in November that stabilization of interest rates in 2024 is a possible scenario – “I will not allow any changes in interest rates during next year and leave the reference interest at 5.75 percent. The answer to this question is: yes. However, this does not mean that I am announcing that this will happen of course. It will likely depend on incoming information about the outlook for inflation and economic activity. He assessed that in 2024 the demand side will come to the fore; what is important is what will ultimately be implemented in the fiscal policy after the parliamentary elections; its form clearly impacts the demand side and replaces the weakening supply issues – which have thus far been of primary importance.
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.
