(Bloomberg) -- Polish central bank will be ready to start cutting interest rates if it is confident in March that inflation is set to slow, according to policymaker Wieslaw Janczyk.
If the forecast in March “confirms the current assumptions of a sustained disinflation trend in the second and third quarters of 2025, the path to cutting will be open,” he said in a written response to questions from Bloomberg. He expects price growth to peak around March or April at no more than 6.9%.
Inflation has been creeping up after hitting the central bank’s target of 2.5% earlier this year as the government began removing caps on energy prices. Once easing starts, Janczyk said he hopes for as much as 100 basis points in cuts next year, although he declined to comment on the size of the first reduction in the cycle.
Janczyk usually votes with the majority on the 10-person Monetary Policy Council led by Governor Adam Glapinski, who last week signaled the cuts may start in the second quarter.
Poland hasn’t joined a spree of rate cuts across Europe, including in the Czech Republic and Hungary, and has kept the main rate at 5.75% for the past 12 months. Glapinski began to pivot last week, saying he’s turned more dovish and predicted multiple reductions next year.
The timing of cuts “is now more to be found in the government’s fiscal policy than in monetary policy,” Janczyk said, echoing similar remarks from Glapinski last week.
Janczyk, a former deputy finance minister in the previous Law & Justice party government, said the recent shift in the governor’s communication could have resulted from a change in the assessment of geopolitical risks and Poland’s fiscal policy.
Asked if deeper cuts by the Federal Reserve or the European Central Bank could prompt policymakers in Warsaw to move faster, Janczyk demurred.
“We must be patient through the next two quarters and monitor the incoming data,” he said.
Janczyk also defended his previous comments from March, when he suggested that sufficient grounds for rate cuts may emerge only as early as the third quarter of this year.
“I was quite alone in my reasoning,” he said. “Confirmation of a sustained disinflationary path in the world economy has been slower than might have been expected.”
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