(Bloomberg) -- Poland will probably repeat this month’s half-point interest-rate hike in February, according to a policy maker who will be attending the last meeting of her term.
Grazyna Ancyparowicz said inflation will probably remain at around 10% for the rest of the year, meaning the Monetary Policy Council must be prepared to raise borrowing costs further. She and her colleagues will most likely decide to bring the benchmark rate to 2.75% at their Feb. 8 meeting, she said.
“It seems that the council will want to move with rates at a similar pace, at least in February,” Ancyparowicz, whose six-year tenure ends the day after the session, said in an interview. “Future decisions will hinge on how prices will react to government’s actions, such as the so-called anti-inflation shield, or the tax revamp.”
Prime Minister Mateusz Morawiecki’s government has scrambled to restrain inflation by cutting levies on everything from gasoline to food and natural gas and offering aid to the most vulnerable households.
The impact of measures on inflation will only be temporary and the central bank should continue its tightening campaign, according to Ancyparowicz.
“All of 2022 will be marked by possible rate increases,” she said.
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The surge in prices caught the National Bank of Poland off guard after it kept interest rates near zero for most of last year. Policy makers have lifted borrowing costs four times since October.
Governor Adam Glapinski said last week rates should rise more than the market expects, adding he’ll seek to persuade his fellow policy makers to extend the cycle this year.
Recent industrial production and retail sales data indicated a better-than-expected economic expansion in the last quarter, leading to full-year growth forecast at around 6% last year, Ancyparowicz said.
Yet she also predicts inflation might have exceeded 9% in January -- the highest in more than two decades and more than triple the central bank’s target -- after soaring to 8.6% in December.
With the central bank slamming on the breaks, this “will unavoidably somewhat limit economic growth to 4% this year.”
Ancyparowicz, 74, is among four policy makers that will depart the 10-person panel next month. Two new policy makers, Ludwik Kotecki and Przemyslaw Litwiniuk, will participate in their first meeting in February.
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