WARSAW (Reuters) – Conditions will not be right for cutting interest rates in Poland until the end of 2025, central banker Ludwik Kotecki said on Thursday, as market participants speculated on when the cost of credit in emerging Europe’s largest economy could start to fall.
According to the National Bank of Poland’s latest forecasts, inflation will not return to its target range of 1.5-3.5% until the third quarter of 2025, but governor Adam Glapinski has said he hopes it will be possible to cut rates at the end of 2023.
“Today there are not conditions (for rate cuts) until the end of the projection period, so until the end of 2025,” he told private broadcaster TOK FM.
Inflation in Poland was 18.4% year on year in February, according to statistics office data released on Wednesday, in what most economists expect to be the peak of the current cycle.
Glapinski has said he expects inflation to fall to single digits at the turn of August and September.
However, Kotecki said that inflation did not show signs of weakening and that prospects of it reaching single digits by the end of the year were receding.
“What worries me is that inflation still does not show significant, lasting signs of weakening,” he said. “In my opinion we are moving away from the promise made by some Council members that inflation could be single-digit in December.”
(Reporting by Alan Charlish and Marek Strzelecki; Editing by Toby Chopra and Bernadette Baum)