Polish Inflation to Rise Sharply in 2022, Central Bank Boss Says

(Bloomberg) -- Polish central bank Governor Adam Glapinski unveiled expectations for sharply higher inflation next year and warned that spiraling prices could become more permanent. 

Speaking just days before an interest-rate meeting, Glapinski said the latest estimates from the central bank staff see inflation peaking in June and not this month as he previously predicted.

The previous forecast came before Poland’s energy regulatory approved a steep increase in power and gas prices in 2022. The government also rolled out a plan of tax cuts on electricity and fuels and prepares to slash levies on food to zero.

Taking those changes into account, Glapinski told Business Insider on Thursday that inflation will peak at 8.3% and slow to 6.2% in December of 2022. The central bank expects inflation to average 7.6% next year, up from 5.8% seen in the November projection, he said.

Higher forecasts, which Glapinski said were partly caused by energy prices, indicate that the central bank is poised to lift interest rates for the fourth straight meeting on Tuesday. 

The session was moved forward from later in the month due to technical reasons, according to Glapinski.

The rise in energy prices could spark higher wage demands amid rapid economic expansion and low unemployment, he said.

“High inflation already covers most categories of goods and services and the process of transferring high price increases to other categories of goods and services may become more permanent,” he told Business Insider. 

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