Inflation in Poland rose by 7.8% in November YoY and by 1.1% from the previous month. After the alarmingly high inflation figures, the Polish central bank felt compelled to act and therefore brought forward its meeting, which was originally scheduled for next week, to yesterday. The central bank council decided to raise the key interest rate by 0.5% to 2.25%. Analysts had previously expected an increase, but with a much higher around the 1% mark.
The latest economic figures clearly point to a recovery in Poland, which has also meant higher wages recently. With rising energy prices and rising wages, companies are seeing increased cost pressure and ultimately have to pass this on to consumers. This is causing inflation to rise. At least Poland is not dependent on the ECB’s monetary policy, since Poland is a member of the EU but has refused to join the eurozone.
If we look at the inflation figures and the interest rates, we can see that the real interest rates remain negative at -5.55%. This means that the purchasing power of the Polish population continues to decline.
The next inflation figures are due on Friday, which will show where the journey is heading.