Glapinski on inflation, the economic situation and bread for PLN 2.99

During a press conference on Thursday, NBP President Adam Glapinski explained the reasons why the Monetary Policy Council kept interest rates at current levels. He also stated that inflation would soon fall “close to optimal levels”.

“The economy is declining, in line with forecasts. This is negative in terms of GDP growth, but positive in the context of fighting inflation. Poland will gradually come out of the slowdown, it will be a soft landing. There will be no recession. No sharp rise in unemployment. The pace of economic growth will be moderate, Adam Glapinski said.

Glapinski: There is speculation about where the recession will be and which countries will avoid it

The President of the Central Bank pointed out that the economic situation in the world is deteriorating.

– There are speculations in which country there will be a recession and which will not, whether it will affect Germany, our main trading partner. Global economic growth in 2023 will be much lower than last year. In particular, in the euro area, GDP growth slowed to 0.1%, while in Germany it fell by 0.2%. compared to the previous quarter, Glapinski said.

He added that the poor economic situation is mainly due to high energy prices. Despite the fact that commodity prices have fallen from their highest level and there is no longer a risk of gas shortages in Europe, gas prices are several times higher than before the Russian aggression in Ukraine.

Although the MPC once again left interest rates at current levels, Glapinski stressed that the end of the cycle of interest rate hikes is out of the question.

“We are seeking the strongest monetary tightening in history. An increase in the interest rate to 6.75 percent. still working and curbing inflation. We want to suppress it as soon as possible without causing a humanitarian catastrophe in terms of living standards and economic activity. We are trying, like other countries, to fight inflation so as not to throw out the baby with the water. In order not to lead to the bankruptcy of companies and an increase in unemployment, Glapinsky said.

How much will inflation fall?

How about inflation? Economists agree with the forecasts of the President of the National Bank of Poland that inflation could exceed 20% in February and March, but should fall from April.

“We are approaching a sharp decline in inflation. We hope that this will be after the first quarter, from March. All forecasts point to this. Inflation will be lower from month to month. How much will fall? Our current forecasts show that it will be around 7.7-8 percent. in the fourth quarter. On my own, I can say that inflation could fall to 6% in December if the current conditions persist. It can be in the range of 6-9 percent. Glapinsky said.

Glapinsky returned to the topic of bread, which he buys close to home

Glapinski returned to a topic that appeared at an earlier conference and became the subject of ridicule on the Internet. We are talking about bread, which the president buys near his house for PLN 2.99. The media — and the Poles on social media — questioned this, because such low prices can hardly be found in stores. Very cheap bread, which can be found with little effort, was supposed to prove that Poland is not as expensive as critics of the NBP president claim.

President Glapinsky once again assured that such cheap bread can really be bought, and even revealed its variety.

- After my statement, the media began to publish conversations with various master bakers who claimed that real bread costs twenty zlotys. I eat Balton bread modestly, very good bread. There are no raisins and cereals, but this is bread, normal, ordinary bread, good. Prices have risen, but not by 30%. Glapinsky said.