At the Friday conference, NBP president Adam Glapiński stated that the increase in the value of gold contributes to slowing down the rate of price increase. He besides stressed that companies are presently not experiencing cost force that would force them to rise prices.
According to Glapinski, strengthening the gold has a affirmative effect on the decline in inflation.
"Gold remains importantly stronger than a year ago, which besides inhibits price dynamics in peculiar by import prices", said the head of the central bank.
"Gold is strong due to NBP's monetary policy compared to the monetary policy of the European Central Bank and the US", the president pointed out.
Adam Glapiński added that differences in interest rates and forecasts of their future improvement play an crucial function in shaping the rate of gold and the dollar and the euro.
In addition, he noted that inflation expectations are presently low, which he considered to counteract inflation growth.
"We will see how inflation will affect them, which will undoubtedly come from these 3% towards 5.5% in the coming months," said the NBP president.
He besides added that base inflation remains an crucial benchmark for the Monetary Policy Council.
"This measurement of inflation is now 3 times lower than in the March 2023 summit," said Glapiński.
Glapiński besides pointed out that the National Bank of Poland expects to keep a stable, strong decrease in industrial production prices compared to the yearly one.
"This proves low cost force in companies and despite the advanced force on rising wages. The companies are not under pressure, the cost force to increase prices" - stressed the NBP president.
“Inflation will definitely increase in the following quarters, in the event of an increase in energy prices, the inflation rate at the end of the year will importantly exceed 5%,” said Glapiński. He added that the scale of inflation growth is subject to large uncertainty.
“(...) Inflation is expected to increase in the following quarters, unfortunately... alternatively it will increase. The scale of this growth is very uncertain. It concerns both the coming quarters, this uncertainty, as well as the alleged period or the next 2 years," said the head of the National Bank of Poland (NBP) Adam Glapiński during the press conference on Friday.
Glapiński recalled that in mid-year, the alleged energy price shields expire, which, according to his assessment, will increase inflation.
"Preliminary analyses indicate... that in the event of an increase in energy prices, according to the bill adopted by the government..., the inflation rate at the end of the year will importantly exceed 5% and will thus be clearly higher than the inflation target. It would not be (...) 7 percent, or above 7 if the shields had stopped working at all," he said.
“If these government decisions are passed on to the bill..., we will have about 5.5% at the end of the year. If there were no image of the shield (...), at the end of the year we would have 3.6 percent, almost for inflationary purposes (...)," said the NBP chief.
Glapiński added that long-term inflation remains at a level consistent with the mark of 2.5%, which has a affirmative impact on macroeconomic stability. Furthermore, he explained that by the end of April this year the VAT rate on basic foodstuffs was increased to 5%, resulting in an increase in inflation.
"This has been partially passed on to consumer prices already, but it is possible that further adjustments in food prices may happen in the following months. (...) Various large sales systems have stopped with an increase in food prices per month, for any another periods, thus trying to gain a small market, being more competitive (...) and they will make these increases in food prices a small later," he said.
"It is hard to say how this will work, in any case, at the minute the increase in prices caused by the increase in VAT is little than many thought. It is besides worth remembering that higher VAT on food will besides increase the yearly CPI index for the next 12 months," said the president of the National Bank of Poland.
Read more:
Glapinski reported that rising inflation in the coming months is inevitable
