Adam Glapiński made the prediction at a news conference in Warsaw on Thursday, Polish state news agency PAP reported.
A day earlier, the central bank’s rate-setting Monetary Policy Council left Poland’s interest rates unchanged, keeping the reference rate at 6.75 percent, according to officials.
Inflation to drop to single digits in 2023
Glapiński told reporters: “We face a long road before inflation falls sufficiently to meet our target.”
He said that “the year has started well,” with news that inflation had fallen “more than expected” in December.
He added: “Inflation may rise again in January or February, but we expect it to fall to the single digits by the end of the year.”
Glapiński cautioned that “reducing inflation too radically may bring very high economic and social costs, which was the case in the early 1990s.”
Tightening cycle ‘not over yet,’ but interest rates ‘may be cut this year’
Glapiński further said that "the tightening cycle is not over yet,” and that the Monetary Policy Council’s next steps would depend on the inflation reading in January and February.
At the same time, it is possible to expect that interest rates “will be reduced as soon as possible, namely when increased demand does not result in higher inflation,” he stated.
“Hopefully this will happen at the end of 2023,” he added.
The Polish central bank’s target inflation rate sits in the middle of a range from 1.5 percent to 3.5 percent, the PAP news agency reported.
Poland set to avoid recession in 2023
Glapiński predicted that the economy would decelerate and that an "economic slowdown will be felt acutely," but added that “according to the central bank's forecasts, Poland will not slump into a recession in 2023.”
Euro adoption would 'radically reduce the rate of Poland’s economic growth'
The central bank chief slammed the idea of Poland joining the eurozone, saying that adopting the euro would “radically reduce the rate of Poland’s economic growth” and “serve the interests of Poland’s rich, who invest abroad, own property abroad and spend money abroad.”
On Wednesday, the Monetary Policy Council left Poland’s interest rates unchanged, keeping the reference rate at 6.75 percent.
Earlier, the rate-setting panel had delivered a string of rate hikes in an effort to contain surging consumer prices.
The Monetary Policy Council in September raised key interest rates for the 11th consecutive time in a bid to tame inflation.
The reference rate at the time went up by 25 basis points to 6.75 percent, from 6.50 percent, amid rising inflation.
Inflation in Poland stood at 16.6 percent in year-on-year terms in December, the country’s statistics office said in a flash estimate on Thursday.
(pm/gs)
Source: IAR, PAP, polsatnews.pl