Polish CPI to peak in Aug at 4.9-5.0% - c.banker

Analysis

Polish inflation is likely to peak in August at about 4.9-5.0% year-on-year and will ease to about 4% at the end of 2008, Monetary Policy Council (MPC) member Marian Noga was quoted as saying on Wednesday.

Noga, seen as a consistent hawk on the 10-strong panel, also said inflation may continue easing and inch down to 3.3-3.5% at the end of 2009. But he reiterated the council should raise rates further at the upcoming April sitting and then pause. “It (inflation peak) will be in August at about 4.9-5.0%, but in December inflation will drop to about 4%,” Noga told Rzeczpospolita daily.

Poland’s inflation in March eased to 4.1% from a year earlier, a notch below February’s 4.2%, easing market expectations the council will raise rates in April for a fourth time this year. Wages grew by 10.2% year-on-year last month, also below the 11.1% expected.

Another MPC member, dovish Miroslaw Pietrewicz, was quoted as saying on Wednesday the data “suggests further observation of the economy, and the (MPC) reaction, if any, should be mild.” The council already raised rates seven times during its current tightening campaign, bringing the key rate to 5.75% in March from a record-low 4% in April 2007, when it started to raise borrowing costs. (Reuters)

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