Demand-driven inflation that would require a response from the Polish central bank could appear in the fall, or perhaps mid-2022, said Governor Adam Glapinski https://www.ft.com/content/e51c6e59-12d1-4ec2- a82c-ea36891e60fd in a Financial Times interview published on Sunday.
Glapinski said, however, that current inflation levels were not worrisome.
A spike in inflation prompted central banks in the Czech Republic and Hungary to hike rates in June, but the National Bank of Poland has stuck to mild rhetoric, arguing the drivers were temporary and not influenced by monetary policy .
“If we see that there is a trend that in a few quarters this price increase could be driven by these factors on the demand side, then we will act,” he said.
“When will it happen? It’s hard to say precisely, but not earlier than in the fall of this year. Or maybe only in the middle of next year. “
Monthly inflation in Poland stood at 4.4% year-on-year in June according to a preliminary estimate from the statistics office, lower than analysts expected and below 4.7% in May. It was still well above the central bank’s target range of 2.5%. plus or minus one percentage point.
Glapinski reiterated that supply-side and regulatory factors were driving inflation, and that when they were removed, inflation was closer to the midpoint of the target range.
“Our approach is similar to that of the Federal Reserve, or the ECB: we are waiting for the economic recovery to be safe and solid, and then we will see if there is a risk of an increase in inflation,” he said.
“And we certainly will not hesitate: we will act immediately as soon as necessary.”
Glapinski told the newspaper that he expected the economy to grow more than 5% next year. He also said he was not concerned about rising property prices.
“At the moment there are no signs of bubbles in the real estate sector fueled by low interest rates. And we don’t expect it, ”Glapinski told the newspaper. (Reporting by Maria Ponnezhath in Bengaluru, Alan Charlish in Warsaw; Edited by Clarence Fernandez and Raissa Kasolowsky)