The MPC will cut your feet in September? There is a space, but it will determine the draft budget and a minimum increase

Inflation in Poland was found for the inflationary of the NBP, but it is not decided that in the first week of September the MPC will reduce interest rates. The Council may wait for the budget details for 2026 and the final decision on the minimum wage. In addition, there are factors of uncertainty, such as preserving the prices of raw materials or exchange rates. Generally, however, the direction indicates decreases in the cost of money.

– Future inflation is influenced by a lot of factors that are independent of both internal economy and in general from politicians and a central bank. I am thinking about political factors here. The script is more likely in which we will deal with a limitation of price dynamics in the world than with higher price dynamics – says Newseria news agency dr Jarosław Janecki, lecturer at the Warsaw School of Economics, chairman of the Council of the Society of Polish Economists.

– However, we can imagine that suddenly crude oil prices will jump up, that there will be an event that will destabilize the Polish zloty in a strong way, and our currency will be weaker. This is likely, but less likely in the coming months – he adds.

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With At the end of the holidays, the break in the decisions of the Monetary Policy Council is also ending. On September 3, the body will set a new level of interest rates or leave them unchanged. For now, economists are divided in their opinions, but most of them seem to be accepted to the forecast of the foot reduction by another 25 base points after the MPC was cut by 75 points in May and July in July. At the same time, the July decision was a surprise and some commentators saw it accelerated in the traffic planned for September.

The doubts of specialists leaning towards the thesis about leaving the feet raises several factors. The first is the July inflation reading, which, although it turned out to be 1 percentage lower than June and amounted to 3.1 percent, but most forecasts assumed a slightly larger decrease. Economists of the largest Polish Bank PKO BP believe, for example, that this is not enough for cutting feet in September. BNP Paribas experts, who bet on one reduction per quarter, think the same, which means that the next one could take place in October at the earliest. In November, the members of the Council will take place another element of knowledge about the economy, i.e. a new inflation report.

– There is one factor important from the point of view of the Monetary Policy Council, which can be taken into account at the September meeting, namely the shape of the budget act for next year – indicates Dr. Jarosław Janecki. – It is known that fiscal policy can affect inflationary processes and now everything will depend, among others From how high the deficit will be next year and what the minimum wage will be. If she is low, as we know today, she will be around the forecast average inflation next year, there will be no such risk. However, all the information related to the budget will not be known to the members of the Monetary Policy Council, hence they may want to wait for additional information. In turn, the space for reduction of interest rates exists, there is only the basic question when these rates will be lowered and on what scale.

The main factors to inflation include fuel prices, on which the cost of producing and transporting goods, zloty exchange rate to the currencies of countries where we pay for imports, and consumers' willing to do shopping. The first two factors in the last year are conducive to lowering inflation, because the zloty strengthens to the dollar, and oil is cheaper. Data on consumption and related salaries are uneven and surprise it in plus, it's in minus. Retail sales in April or July exceeded the forecasts, while in February and June it was a disappointment. Similarly, salaries in enterprises employing at least 10 employees: in April and June, wage growth surprised with power, which is an argument against reductions (although in July the council introduced such), while in July it turned out to be lower than the forecast and amounted to 7.6 percent.

– Wage dynamics is an important factor from the point of view of inflationary processes that it affects the income of consumers. It can also translate into an increase in product and services prices due to stronger consumer demand. I believe that the dynamics we are dealing with today, around 8 percent, is not dangerous from the point of view of future inflation – says the chairman of the Council of the Society of Polish Economists. – However, from what we know from the statements of some MEP members, from the point of view determining the levels of interest rates, the best would be dynamics around 6 percent. year on year. This is an important factor, not the only one, but in recent months the MPC members often refer to this factor. It seems to me that the last data, however, indicates that wage pressure is getting lower, and this year resulted, among others, from a high minimum wage increase, which will not be next year.

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