WARSAW (Reuters) -There is room for further rate hikes in Poland, but smaller ones than there have been up until now, Polish central banker Cezary Kochalski was quoted as saying on Thursday.
Poland’s central bank is faced with slowing growth and inflation that has risen to its highest level in a quarter of a century, posing a headache for policymakers.
“Assuming that the economic situation develops in line with the July projection… and allowing a certain margin for possible deviations, I still see room for possible further interest rate increases, albeit on a smaller scale than before,” Kochalski told state-run news agency PAP.
Kochalski said rate cuts in 2023 were a possibility.
“I would expect inflation to decline next year. I can see more uncertainty with respect to the GDP growth, more specifically, to the scale of the economic slowdown,” he was quoted as saying.
“This leads me to the conclusion that a perspective of potential rate cuts in 2023 cannot be excluded.”
The Polish central bank raised its main interest rate by a total of 640 basis points over the last year to 6.50% in July.
Polish central bank governor Adam Glapinski said in an interview with Business Insider Polska this week that inflation may increase further in August, but the pace of price growth may soon slow down and limited rate hikes are still possible.
(Reporting by Alan Charlish and Anna Wlodarczak-Semczuk, Editing by William Maclean)