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October 4, 2022
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NBP divided on what awaits us in 2021 –

As we learn from the NBP notes, during the meeting of the Monetary Policy Council (MPC) a month ago, some members of the authority said that inflation in 2021 may be higher than projected in the November projection.

NBP: inflation will rise

“Certain Council members assessed, however, that inflation in 2021 might be higher than expected in the November projection. Those members argued that the price growth might be boosted – apart from the rise in administered prices – by faster growth in the prices of services. At the same time, they pointed out that towards the higher one inflation an increase in the minimum wage may also have an impact, which may translate into an adjustment of wages also for people earning more than the minimum wage “

– we read in the notes from the Monetary Policy Council meeting on November 6.

However, MPC members are divided. Others believe prices will start to fall soon:

“Those members pointed out that the decline in inflation next year would be supported by the continuing negative output gap and higher unemployment, which would limit the growth of unit labor costs. Limiting on inflation will also be affected by the likely persistence of low price growth in the environment of the Polish economy. “

What awaits us?

So as you can see, opinions in the MPC are very divided.

Council members also said that amidst the probably limited level of economic activity, unemployment might rise in the following year and the number of working people might decline.

“It was noted that high uncertainty regarding the further development of the pandemic and its impact on the economy persisted. Hence the risk to growth GDP in the November projection they are directed mainly downwards. Some members of the Council expressed the opinion that in the coming quarters it was possible to periodically ease and tighten sanitary restrictions in response to the changes in the epidemic situation, which would be a significant determinant of economic development. Certain members of the Council argued in this context that some economic entities limited their activity as the pandemic develops, regardless of the restrictions introduced ”

– we read in “minutes”.

It was added that our domestic economic activity will be affected by the deterioration of economic conditions in other countries and the lack of a clear and more permanent adjustment of the zloty exchange rate to the global shock caused by the pandemic and the loosening of the NBP monetary policy.

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