Poland’s central bank chief promises to fight inflation

Adam Glapiński assured that the inflation rate in Poland will begin to decrease after a few quarters but will maintain its current level until the first quarter of 2022

editor: Grzegorz Adamczyk
author: PAP/forsal.pl
Picture source: NBP

The Polish central bank has undertaken decisive actions to limit inflation, according to the chief of the National Bank of Poland (NBP), Adam Glapiński.

He stressed that interest rates have been increased twice and could be increased even more if the situation demands it. He added that inflation has grown to the highest levels in decades in the majority of countries.

“Just as we were determined to save the Polish economy during the pandemic, we will not allow high inflation to gain a foothold in Poland,” said Glapiński.

The head of the Polish central bank explained that inflation will remain high until the first quarter of 2022 due to rising global prices of gas and resources, high gas prices in Europe, and the consequences of EU climate policy, which influences the prices of electricity. He assured that the central bank’s actions will help ensure these factors will not lead to a permanent increase in inflation rates. According to Glapiński, after a few quarters, inflation will begin to decrease.

Glapiński also spoke about the construction of nuclear power plants in Poland and declared that the NBP was ready to indirectly support such an endeavor using the tools at its disposal. He added that the nuclear power plant project was also compatible with the central bank’s mandate, as the investment would lead to the medium-term stability of prices and therefore limit energy price increases and help lower inflation.

Moreover, the head of the NBP indicated that there was a clear rebuilding of investor confidence from companies following the pandemic.

“In the third quarter of 2021, the general index of investment optimism among surveyed companies saw an increase for the fifth quarter in a row. The index is shaping itself up to a level close to the one from the peak of the last investment cycle in 2018,” he said.

Glapiński stated that according to NBP forecasts, the gross fixed capital formation for 2022 will exceed the level recorded prior to the pandemic’s outbreak.

He also announced that the Polish central bank would financially aid the Armed Forces Support Fund as national defense was one of the most important functions of the state.

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