(Bloomberg) -- Poland’s inflation accelerated for the fifth straight month in August to the highest reading this year after the government curbed energy price subsidies, signaling that interest rates will remain on hold longer.
The inflation rate rose to 4.3% from a year earlier, compared with 4.2% in July, according to preliminary data released on Friday. It matched the median forecast of 4.3% in a Bloomberg survey of 22 economists.
The central bank has predicted consumer price growth to accelerate, expecting inflation to peak at more than 6% at the start of next year and then gradually slow down to target at the end of 2026. The Monetary Policy Council’s medium-term goal is to keep inflation within its tolerance range of 1.5% and 3.5%.
Most of the rate-setters who have spoken publicly in the past weeks have allowed for rate cuts next year, including the central bank Governor Adam Glapinski, who retracted his earlier comments that easing may have to wait until 2026.
Poland’s central bank has kept its benchmark rate unchanged at 5.75% since October, despite inflation easing from a peak of 18.4% in February 2023. Prime Minister Donald Tusk has blamed Glapinski, an ally of the formerly ruling populist Law & Justice party, for holding back economic growth with restrictive monetary policy.
The rate-setting panel holds its next policy meeting next week.
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