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Poland's Rate Cut Hopes Fade as Inflation Surges
30 Apr
Summary
- April inflation rose to 3.2%, exceeding analyst forecasts.
- Policymaker Dabrowski stated rate cut likelihood has drastically reduced.
- The Monetary Policy Council has maintained a wait-and-see approach recently.
The likelihood of Poland enacting interest-rate cuts has sharply declined as inflation accelerated in April. The Central Statistical Office reported inflation reaching 3.2% for the month, surpassing the 3% recorded in March and exceeding the 2.9% predicted by market analysts. This uptick is seen by analysts as an indication that the economic repercussions from global energy price volatility are now permeating other areas of the Polish economy.
Monetary Policy Council member Ireneusz Dabrowski commented that the probability of reducing interest rates has significantly diminished given the current inflation data. The Monetary Policy Council, which had previously lowered rates by a cumulative 200 basis points over the past year, shifted to a more cautious, wait-and-see approach regarding potential future policy adjustments at its last meeting. The council's next scheduled rate discussion is set for May 5-6.
