Appreciation is not enough in the fight against inflation
The Bank of Poland takes its main rate to 4.5%, projecting 6.5% this year and 7.5% in 2023. Meanwhile, companies are passing higher costs on to CPI.
The Bank of Poland takes its main rate to 4.5%, projecting 6.5% this year and 7.5% in 2023. Meanwhile, companies are passing higher costs on to CPI.
The conflict in Ukraine has created another excuse to blame inflation on oil and natural gas, rather than the increase in the money supply.
Household consumption will keep sustaining the Polish economic growth o\in 2022, and high producer prices will be passed on to final consumers.
In Lithuania, the inflation rate reached around 11% in early 2022, and heating bills are expected to increase by 50% to 60%.
Last December the surplus on the CAB contracted to €66.5 million due to a significant widening of the foreign trade deficit.
GDP and consumption booms continue, but price-wage spiral too, as consequence of expansionary economic policy in recent years.
Lithuanian export of goods rose more rapidly than imports. The largest share of FDI was attracted by companies in financial and insurance activities.
NBP action lags behind other CEE central banks, while authorities pretend the elevated CPI to be a result of external supply shocks.
The risk of wage-price spirals is increasing in front of labour shortages, commodity prices, and the tax changes introduced in the new “Polish Deal”.
Estonia showed one of the fastest recoveries from the crisis with an economic growth of 8%. However, a slow down is now expected.