(Bloomberg) -- Polish policymaker Ludwik Kotecki said he hopes the Monetary Policy Council will start reducing interest rates in early 2025 and that Governor Adam Glapinski won’t harden his recently more dovish rhetoric.
Kotecki said he’s near the point where he will back lower rates, especially as inflation is expected to decline to the policymakers’ target by the end of 2025. Glapinski unexpectedly softened his stance on the prospects for monetary easing earlier in September, saying that a reduction was possible around the middle of next year.
“I hope that the rest of the MPC, particularly the governor, who nevertheless sets the tone for the council, will not return to rhetoric indicating the need to postpone rate cuts until 2026,” Kotecki told Bloomberg News. He said recent floods that hit Poland won’t have any significant impact on the path of inflation.
Kotecki, one of 10 members on the rate-setting panel, said inflation — which stood at 4.3% year-on-year in August — may accelerate to around 5% in September and peak at 6% in January or February. But it’s expected to slow during the second half of 2025, ending the year around 2.5%.
“It seems that the vast majority of the MPC is ready to start discussing reductions in the first quarter of next year,” Kotecki said. The panel has kept its benchmark on hold at 5.75% since late 2023, bucking both regional and global rate cut trends.
“We should and most likely will start with a 25 basis-point cut,” he said about the scale of the initial reduction. “I expect the total size of interest rate cuts over 2025 to be no more than 100 basis points.”
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