Polish Prices Grow Less Than Expected to Back Steady RatesOtt Ummelas and Dorota Bartyzel
Polish consumer prices rose less than expected in January, supporting the central bank’s pledge to keep interest rates unchanged until at least mid-2014.
Prices advanced 0.7 percent from a year earlier, unchanged from the previous month’s rate, the Warsaw-based statistics office said today. The median estimate in a Bloomberg survey of 35 economists was for a 0.9 percent increase. Prices rose 0.1 percent from December.
Policy makers last week repeated a pledge to keep the benchmark interest rate at a record-low 2.5 percent through at least June as demand, wage and cost pressures remain “low.” The European Union’s largest eastern economy may expand 2.9 percent this year, emerging from the worst slowdown since 2009, according to a Bloomberg survey of 40 economists last month.
“Inflation growth will be mitigated this year by low global oil and grain prices as well as Russia’s ban on the country’s pork exports, which will create excess local supply,” Rafal Benecki, chief economist at ING Groep NV’s unit in Warsaw, said by phone. “In addition, we’ll still see prices under the delayed influence of the economic slowdown.”
The zloty strengthened 0.4 percent to 4.1467 per euro at 3 p.m. in Warsaw, paring an advance from before the data were released. The yield on two-year notes fell seven basis points to 3.01 percent.
Gross domestic product rose 2.7 percent from a year earlier in the fourth quarter, trailing the median estimate of 35 economists for 2.9 percent expansion, the statistics office said today.
The inflation rate remains low with no signs of price pressure, while the economy is in a “strong” acceleration, central banker Anna Zielinska-Glebocka said today in an interview on TVN BiS.
“Economic growth should exceed 3.5 percent this year and inflation will stay below the central bank’s target range of 1.5 percent-3.5 percent through 2014,” central banker Elzbieta Chojna-Duch said today in an interview on TVN BiS.
She said policy makers may decide in March to either extend their forward guidance beyond mid-2014 or switch to a wait-and-see mode.