Inflation in Poland has reached levels not seen since December 2000. – We will do everything we can to keep inflation as short as possible and as gentle as possible, said Polish National Bank President Adam Glapinski on Wednesday. – According to our current forecast, after the first quarter (2022 – ed.), it will decrease and not be very painful, although it will be about 5% – added Glapiński.
According to the preliminary data of the Central Statistical Office, inflation in November is on an annual basis By 7.7 percent. This is the highest level since December 2000, when inflation was 8.5 percent year on year.
I can assure you that inflation is our main concern. Us, but also the government. We’ll do everything we can to keep inflation as short as possible and as gentle as possible. According to our current forecast, it will decrease after the first quarter and not be so painful, although it will be around 5% – said on Wednesday during the ceremony of the 19th edition of Władysława Grabski, NBP President Adam Glapiński.
This is a level above the NBP inflation target of 2.5%. Plus/minus 1 percentage point.
Glapinsky cited the words of Jerome Powell, Chairman of the Federal Reserve (Fed), who said he has resigned from saying that inflation is temporary and must admit that it will be a nuisance. – I also say that today. I change my speech. Inflation is temporary, but over a period of two years, which is also unknown, although this is what we see now. Inflation is not temporary, inflation is a heavy burden. We will try to reduce it to a minimum, but not at the expense of high unemployment. I don’t think anyone is going to force us to do that. Nobody is forcing us to dramatically increase unemployment. This cannot be done in Poland. And we will be able to deal with inflation – this was confirmed by Glapinsky.
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Interest rates and inflation
The head of the Central Bank stated that changes in interest rates did not affect the current inflation. The benchmark interest rate rose – after two increases in October and November – by a total of 115 basis points to 1.25 per cent. The next decision-making meeting of the Monetary Policy Board is scheduled for Wednesday, December 8th.
– This is forward oriented, for a few quarters when secondary effects appear, we want to prevent that. We have no influence on the inflation that exists at the moment. This can only be affected by fiscal policy, which the government has just done. By lowering taxes, production fees, or removing the burden entirely. But it is of course also not free lunch, of course this also means that there is less revenue in the budget – said Glapinski.
– This means that the government will have less money to spend in some areas. It also costs money. He added that whether it is in social policy or in investments, in some costs related to some activities for the public good.
The Cabinet adopted on Tuesday A bill amending the excise tax law and the retail sales tax law. The regulations provide for a temporary reduction in excise tax on motor fuels (diesel oil, gasoline, and LPG), exemption from excise tax for the sale of electricity used by households and a reduction in the tax rate on electricity. There is also a temporary exclusion of fuel sales from tax with retail sales tax.
The governor of the NBP made a reservation that despite the problems of inflation and the epidemic, the economic situation in Poland was very good. – Even with this rising inflation – because it is not hyperinflation or hyperinflation, it is simply hyperinflation – Poland’s economic situation is very good. This is the best economic situation since the partition. Adam Glapinski said Poland is the first large country to recover from the crisis, with dynamics of around 5 percent of GDP.
Main image source: NBP
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