Interest rates in Poland will increase even more, estimates Paweł Borys, president of the Polish Development Fund. In his opinion, the next rate hikes to be made by the Monetary Policy Council will amount to 0.25-0.5 percentage points, and the target level of interest rates in the optimistic variant will amount to 7.5%. If this forecast came true, according to experts’ calculations, the average loan instalment would increase by about 11-12 percent.
Highest level of the reference rate since 2008
This week, the Monetary Policy Council increased by 0.75 percentage points (75 basis points), thus raising the main NBP rate to 5.25%. This is the highest level of the reference rate since 2008. But after all lower than the rumour said. It was the eighth consecutive rate hike made by the MPC. The previous one, in April, was 100 basis points.
“Lower than the previous increase by 0.75 points. percentage points, indicate that subsequent increases can be made with smaller movements: more 0.5 or 0.25 points. percentage”, said Paweł Borys in an interview with the Polish Press Agency.
The head of the Polish Development Fund pointed out that the financial market currently assumes that rates will increase to 7.5 percent. in three months, but from 2024, they will start to decline.
“Next decisions of the MPC should depend to a greater extent not on current data, but those forecast for the second half of 2022 and 2023 – assessed Borys, adding that the war in Ukraine, which causes an increase in energy and food prices, will lead to an economic slowdown in Poland and in around the world, which may reduce inflationary pressures.
As geopolitical tensions ease, the pressure on price increases should also ease”, says Paweł Borys.
“Therefore, in a positive scenario, interest rates will stay below 7.5%, but in the face of strong economic conditions and cost pressure, rates will have to be raised to this level”, said the president of PFR in an interview with PAP.
Loan instalments will increase a lot in Poland
The previous increases in the central bank’s interest rates have resulted in a marked jump in WIBOR rates, which are the basis for the interest rates on loans granted by Polish banks. In the case of the three-month WIBOR, the rate increased from 0.23 percent. before the start of the increase cycle to 6.34 percent. Nowadays. According to Expander’s calculations, this resulted in an increase in the instalment of the loan taken in October 2021 for the amount of PLN 300,000 PLN for 25 years from approximately PLN 1440 to approximately PLN 2506 per month.
If the rates had risen to 7.5 percent then the instalment, according to the same simulations, would increase to PLN 2,806.
The MPC raises rates due to the rapid rise in inflation. According to data from the Central Statistical Office of Poland (GUS), in April it amounted to 12.3%, the highest level since 1998.
Source: 300gospodarka
