WARSAW (Reuters) -Poland’s GDP may fall in the first quarter of 2023 and inflation may remain at two-digit levels until the end of 2024, rate setter Ludwik Kotecki said on Monday, arguing interest rate hikes should be faster and stronger to curb price growth.
The central bank raised its main interest rate by 25 basis points to 6.75% earlier this month, the smallest increase so far in its current rate hike cycle, as it said it expected lower growth and continued inflationary pressure.
“I think those hikes are too small … we will keep on rising like that every month. We’ve already had 11 hikes, I’m afraid we will end up with maybe 20 such tiny hikes,” Kotecki told private broadcaster TVN24.
“I think a better approach would have been to have more robust hikes earlier this year.”
He pointed to the level of core inflation – around 10% – saying that interest rates at the same level would “actually slow down inflation very efficiently”.
“We won’t have inflation under 10% I’m afraid until the end of 2024,” he said.
He added that after a fall in GDP in the second quarter, he expected a further slowdown at the turn of 2022 and 2023, with a fall in GDP particularly in the first quarter.
(Reporting by Pawel Florkiewicz and Anna Wlodarczak-Semczuk; Editing by Christopher Cushing and Philippa Fletcher)