Polish central bank forecasts inflation peaking at 18.8% in Q1 2023
WARSAW (Reuters) – Poland will see inflation peak at 18.8% and financial development fall to as little as 0.5% within the first quarter of 2023, in response to forecasts printed by the central financial institution on Tuesday.
In response to the projections, rising Europe’s largest financial system is on monitor for greater inflation and decrease development subsequent yr partially as a result of struggle in Ukraine, posing a headache for policymakers making an attempt to sidestep what some economists say is a threat of stagflation.
The central financial institution targets inflation in vary of 1.5-3.5%.
“The financial outlook and CPI inflation path in Poland rely to the best extent on the dimensions of disruptions to the world financial system triggered by Russia’s army aggression in opposition to Ukraine,” the central financial institution mentioned.
The brand new inflation projections present a marked improve from a forecast made in March, when inflation of 11.7% was predicted for the primary quarter of 2023.
Inflation in 2022 and 2023 is now forecast at 14.2% and 12.3% respectively, in comparison with the ten.8% and 9.0% forecast in March.
Gross Home Product (GDP) development is seen bottoming out at 0.5% within the first quarter of 2023, in comparison with a forecast of two.1% in March. The central financial institution forecast GDP development of 4.7% for 2022 and 1.4% for 2023.
In March, the central financial institution forecast development of 4.4% in 2022 and three.0% in 2023.
(Reporting by Pawel Florkiewicz and Alan Charlish; Enhancing by Simon Cameron-Moore)
