POLL-Polish c.bank to raise rates by 100 basis points to deal with soaring CPI

Band Alan Charlish

WARSAW, May 4 (Reuters)The National Bank of Poland (NBP) is set to make its second consecutive 100 basis point hike on Thursday, according to a Reuters poll, taking the cost of credit to 5.5% as it grapples with the worst inflation high for nearly a quarter of a year. century.

Consumer price inflation (CPI) beat analysts’ estimates to hit 12.3% in April, according to a quick estimate from the statistics office, and analysts expect a sharp hike in rates to counter the price growth which reached its highest level since 1998 partly due to the war in Ukraine.

Additionally, retail sales and industrial production data surprised on the upside, showing that the biggest economy in the eastern wing of the European Union remains healthy.

“They are still behind the curve, inflation is out of control and they need to get inflation under control,” said Piotr Bielski, director of Santander Bank Polska’s economic analysis department.

Bielski said recent government measures to help those struggling due to higher rates have made the task of controlling inflation “even more difficult”.

In April, Polish Prime Minister Mateusz Morawiecki announced plans to allow borrowers struggling with higher rates to make interest-free repayments on certain tranches, while banks would contribute to a new bailout fund.

“The central bank is raising rates but the government is trying to reduce the impact of those hikes on households, which kind of leads to the conclusion that those hikes will have to be bigger than without those measures,” Bielski said.

The survey of 23 analysts was conducted on April 28 and 29. Of those polled, 16 analysts were forecasting a 100 basis point hike, four were forecasting 75 basis points and three were forecasting 50 basis points.

(Reporting by Alan Charlish; Editing by Toby Chopra)

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