Poland Holds Rates Steady as Recession Risk Overshadows Prices

Poland left borrowing costs unchanged as the threat of an economic recession overshadows concerns over the highest inflation in more than a quarter century.

(Bloomberg) — Poland left borrowing costs unchanged as the threat of an economic recession overshadows concerns over the highest inflation in more than a quarter century.

The country’s key interest rate was left on hold at 6.75% for the fourth consecutive month, matching expectations of all 25 economists surveyed by Bloomberg.

Central bank Governor Adam Glapinski calmed an increasingly public dispute within the rate-setting Monetary Policy Council late last year as his warnings over excessive tightening dovetailed with signs that risks from inflation were subsiding as the peak neared.

Consumer prices decelerated in November to 17.5% from a year earlier, but are expected to gain pace in the first quarter due to an increase in regulated prices. Inflation is set to peak in March or April, Premier Mateusz Morawiecki said on Monday.

Policy makers haven’t officially ended the monetary tightening cycle that brought rates up from near zero in October 2021. The governor will hold a news conference to explain the decision at 3 p.m. in Warsaw on Thursday.

–With assistance from Barbara Sladkowska, Piotr Bujnicki and Wojciech Moskwa.

More stories like this are available on bloomberg.com