(Bloomberg) -- Poland is likely to extend an interest-rate pause amid quickening inflation and a widening budget deficit as investors await fresh central bank guidance on when easing may begin.
The rate-setting Monetary Policy Council will leave the benchmark at 5.75% on Wednesday, according to all 36 economists surveyed by Bloomberg. The central bank is also set to publish new forecasts on inflation and economic growth, with Governor Adam Glapinski due to hold a news conference on Thursday.
While the majority of policymakers, including Glapinski, have signaled that rate-cut discussions may start early next year, officials need to weigh an acceleration in inflation to a peak this year and a government decision to revise the fiscal gap upward.
“Glapinski is likely to point out that fiscal policy is worse than previous assessments and plans, which will provide another argument for maintaining a restrictive monetary policy,” Rafal Benecki, chief economist at ING Bank Slaski, said in a note.
A slump in September’s retail sales sparked concerns that consumer demand, a key engine of economic growth in the European Union member state, may be flagging and prompted some economists to call for rate cuts to start in December. Still, even after that drop, which was the steepest in 14 months, some MPC members signaled they were in no rush to kick off deliberations on easing.
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