Polish central bank raises inflation forecasts, cuts growth outlook
Adds analyst comment in paragraphs 8-10
WARSAW, Nov 6 (Reuters) -Poland's central bank raised its inflation forecast and cut expectations for GDP growth in its November projections published on Wednesday after it decided to leave its main interest rate unchanged at 5.75%.
Inflation in Poland has fallen from a peak of 18.4% in February 2023, but it has rebounded in recent months after falling to the central bank's target range of 1.5-3.5% earlier this year.
"In the current round, the inflation projection is associated with substantial uncertainty, related to price developments of energy carriers for households," the bank said in a statement.
It said inflation would remain high for the coming quarters, especially in the event of a further increase in energy prices at the beginning of 2025.
"When the effects of the energy price increase fade and amidst the expected slower wage growth... inflation should return to the medium-term NBP target," it said.
The bank sees inflation of 3.6-3.7% in 2024, 4.2-6.6% in 2025 and 1.4-4.1% in 2026. That compares with its July forecasts of 3.1–4.3% in 2024, 3.9–6.6% in 2025 and 1.3–4.1% in 2026.
The bank expects annual GDP growth to be in the range of 2.3-3.1% in 2024 (against 2.3-3.7% in the July 2024 projection), 2.4-4.3% in 2025 (compared to 2.8-4.8%) and 1.7-4.0% in 2026 (compared to 1.9-4.3%), it said.
Analysts said the new forecasts did not change expectations that interest rates will remain unchanged for now.
"The forecasts assume... the unfreezing of energy prices for households at the beginning of 2025, which, however, is unlikely to take place on a full scale. Therefore the Monetary Policy Council must wait with decisions regarding interest rates," Bank Pocztowy chief economist Monika Kurtek wrote in a note.
"The first date when the Council could cut rates is, in my opinion, March 2025, although it must be emphasized that the result of the US presidential elections raises many questions and may also affect what happens to monetary policy in Poland."
Reporting by Alan Charlish, Pawel Florkiewicz, Anna Koper, Anna Wlodarczak-Semczuk; editing by Barbara Lewis and Alexander Smith
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