Poland’s Central Bank Governor Concerned About Inflation Amid Higher Food Taxes and Energy Price Changes

Poland’s central bank governor, Adam Glapinski, is still concerned about potential inflation flaring up again due to higher food taxes and the possibility of removing energy price limits, despite a recent drop in inflation rates. The central bank is expected to keep its interest rate at 5.75% for the seventh consecutive meeting, according to a Bloomberg survey of economists. Despite this, Glapinski has expressed reluctance to cut borrowing costs, citing fears of inflation rising once more.

In March, Poland’s annual inflation rate fell to 1.9% from the previous month’s 2.8%, surpassing market expectations of 2.2%. However, the Monetary Policy Council (MPC) notes significant uncertainty surrounding inflation fluctuations, particularly driven by fiscal and regulatory policies, economic recovery pace, and labor market conditions in Poland. While Finance Minister Andrzej Domanski has suggested lower rates could benefit the economy and budget, only a minority within the MPC supports further rate cuts until the impact of government energy pricing plans on inflation is confirmed.