A firm voice from the MPC. “Any reduction of the feet is a departure from the mandate and harming the economy”
After his last week's return, the Republic of Poland members indicated in large numbers that the time for the reduction of the feet is coming, it could happen in May. It was even said that the reduction could have occurred in April, but “financial markets were not ready for this”.
The mood moods did not participate in Joanna Tyrowicz, who is known for “Jastrzębie” attitude: from November 2023. At each meeting, she submits an application for a rate of foot by 2 percentage points.
Her conversation for “Dziennik Gazeta Prawna” shows that “in the light of the March projection of the NBP any reduction today it is a departure from the mandate and harming the Polish economy, although if the wages actually slowed down, then the current rate may be enough to bring inflation to the goal.” Her statements suggest that it is closer to refraining from applications for increases rather than supporting foot reductions.
– interest rates lower by approx. 1 percentage point In a two -year horizon, they translate into higher inflation by about 0.7 percentage points. Two years later. This simple relationship does not depend on the specific level of market rates. Additional 0.7 percentage points It means that in 2027 we are outside the upper range of deviations from the goal. In the light of March and numerous previous projections, any reduction today is a departure from the mandate and harming the Polish economy – said Tyrowicz, cited by DGP.
– If the wages actually slowed down, maybe – in combination with other data – from now on a 5.75 percent rate. It is enough to bring inflation to the target. Indeed, according to the current projection, at this level of feet in the second half of 2026, we enter the deviation band. This is the first projection that shows that we do not catch the upper range of deviations from the goal in the last quarter of the projection horizon, only for a few quarters we are close to the goal – she added.
Tyrowicz at the same time drew attention to the specific assumptions of the March NBP projection, including a strong reduction in salary dynamics. – Such assumptions were also earlier and they, so far, were not confirmed in the data. Another important assumption is to maintain a high speed of saving households. She is now 2.5 times higher than the historical average. I will mention the exchange rate. Until now, strong zloty has supported the reduction of inflation, but there is no guarantee that this trend will persist. And any weakening of the zloty would intensify inflationary pressure in goods – she added.
