Dr. Jakub Borovski, chief economist at Credit Agricole, believes that the MPC will not have the opportunity to cut interest rates before the fall election. He also expressed surprise that the NBP has calculated the costs of implementing social programs proposed by the PA and PiS. “In the history of modern central banks, I don’t remember a situation where a central bank evaluated and selectively selected elements of election programs,” he said.
In the program “Prosto z Parkietu”, Dr. Jakub Borovski, chief economist at Credit Agricole, estimated that the chances of lowering interest rates before the autumn parliamentary elections are slim.
Is there a chance to lower the interest rate?
With the economic recovery intensifying, which is likely to lead to faster GDP growth this year than the NBP’s March forecast suggested, and with no prospect of inflation returning to the NBP’s target even in 2025, there is room for interest rate cuts in this year of interest, he said on Straight from the Dance Floor.
He added that he is aware that various institutions, including global ones, do not rule out a rate cut, not because the state of the economy allows it, but for political reasons, in order to increase the chances of the ruling party to win again.
– I regret to say that such speculation is evidence of a decline in confidence in the central bank of Poland. He added that the fact that in some analyzes there is a link between the political situation and rate decisions is not very good.
The NBP estimated the cost of implementing the election programs. Borowski says this is unprecedented behavior
Jakub Borovski expressed surprise at the NBP’s calculations, which took into account how much the fulfillment of PiS and PO’s election promises would increase inflation in the coming years. The bankers’ calculations showed that the PO program would increase inflation in the coming years by 0.3 and 0.8 percentage points, and the PiS program by 0.1 and 0.3 percentage points.
According to the analyst, such participation of the Central Bank in the campaign is unprecedented. – In the history of a modern central bank, I do not remember a situation when the central bank evaluated – and selectively – selected elements of election programs. After all, there are more of these proposals, and only two parties do not participate in the elections, he said.
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