Poland's Goldilocks Economy Faces Inflation Wake-Up Call
- CPI exceeds expectations, reaching 2.5% central bank goal
- Derivatives show bets on quarter-point rate rise within year
Central bank Governor Adam Glapinski likes to refer to Poland’s economy as so balanced that it’s “boring,” conjuring up a Goldilocks scenario that has allowed him to repeatedly extend a “wait-and-see” stance over whether to raise interest rates from record lows.
A surprising pick-up in inflation in November suggests, however, that the era of fast economic expansion accompanied by benign price growth is coming to an end in Poland. The consumer price index surged to the central bank’s 2.5 percent target for the first time since 2012, topping the predictions of 21 of 23 economists surveyed by Bloomberg. Meanwhile, a revision showed third-quarter economic growth at 4.9 percent from a year earlier, the fastest in almost six years. PMI, a gauge of manufacturing, hit an eight-month high.