The Monetary Policy Council (MPC) will raise the main reference rate to 6% in 2022 (from 3.5% now) and will continue to increase rates in 2023 – to 7.5%, they estimate economists of ING Bank Śląski. According to them, at the end of 2022 the zloty may return to 4.50 against the euro and below 4.00 against the dollar.
We believe that in response to persistently high inflation, the NBP will raise interest rates to 6% already this year and will continue hikes in 2023 to 7.5%. This contrasts with the policy of the ECB, which will probably start its rate hikes only in Q4. 22, according to the bank.
The chief economist of ING BSK, Rafał Benecki, emphasizes that the bank’s estimates include a precautionary scenario, and that the target level of interest rates in Poland in the range of 5-10% is a wide range.
“Our point forecasts are the target rate of approx. 7.5% in 2023-2024. Then in 2024 I assume that the rates will be lower, as 2024 may be weaker in terms of GDP, because there will be so-called the euro hole, i.e. a year in which there are less EU funds, so the level of interest rates will probably be 2 or 3 percentage points lower in 2024. But in the near future we see further increases in 2022 to 5.5-6.5% and still quite solid economic growth in 2023, which will also be an election year.We see the level of interest rates in 2023 around 7.5%, then there will be a decline in interest rates due to the slowdown in 2024. It is worth preparing, in my opinion, that a decade of low interest rates is over and we have a decade of higher rates and higher inflation ahead of us – not as high as in the 1970s. Nevertheless, financial markets are probably pricing-in higher than they are now, when it comes to the next year and two “- said Benecki during the online conference ‘Why Decades Are Over and low inflation and low interest rates? ”
The president of the National Bank of Poland (NBP) and the chairman of the Monetary Policy Council (MPC), Adam Glapiński, announced at the last press conference that the MPC will continue to raise interest rates at subsequent meetings, and if necessary, it is possible to hold decision-making Council meetings twice a month.
Earlier in March, the Monetary Policy Council raised interest rates by 75 bp – to 3.50% for the main reference rate. It was the sixth rate hike in a row.
Source: ING BSK and ISBnews
