The annual rate of inflation in Poland is now 15.6 percent, according to the Central Office of Statistics (GUS) with many commentators believing the rate will continue to increase until autumn. Others believe that the rate of inflation will peak in July or August.
Piotr Bujak, chief economist of Polish bank PKO BP, told Catholic broadcaster Siódma9 that the most recent figure of 15.6 percent from June may already be the peak. He argued that Polish petroleum giant Orlen’s cut in the price of fuel could play a key role in reducing the July inflation figure.
The Polish economist said that as long as oil and food prices stabilize, there is a chance of containing inflation in the coming months. He did not feel much more could be done to contain price rises than the actions taken so far by the government, such as lowering the rate of VAT and increasing interest rates.
Bujak is concerned about the situation facing Polish industry with the PMI indicator falling to its lowest level in two years. He acknowledged that orders and production were down and said that Poland, like the U.S. and much of Europe, could soon find itself in a short and shallow recession. The upside of that scenario is that this would limit inflation.
He felt the central bank in Poland should be cautious about further increases in interest rates, and said that Poland may soon be coming to the end of central bank rate hikes.