TOP MACRO THEME(S):
- The end of monetary tightening is near: The MPC raised NBP rates by 25bps, the key policy rate to 6.75%. It was the smallest hike in the current tightening cycle, the most aggressive in over 20 years.
WHAT ELSE CAUGHT OUR EYE:
- The Senate has appointed prof. J.Tyrowicz as an MPC member. She is a professor of economics at University of Warsaw, covering mostly labour economics, and has previously (2007-2017) worked at NBP’s Economic Institute. J.Tyrowicz in her first statement asserted that lowering inflation is the priority for her term. She thinks that Polish economy is overstimulated and there is a need to find reasonable policy mix. In our assessment J.Tyrowicz will be rather hawkish, but as she noted, high inflation “makes ornithological discussions baseless” (more in Monetary Policy Monitor).
- Unemployment rate in August stood at 4.9% for the third month in a row (according to MinLab estimates). The seasonal adjusted rate did not change either (5.0%). Migrants are systematically becoming more important part of Polish labour market. At the end of July, there were 1,024 mln foreigners paying social security contributions (6.3% of all insured), from which 756 ths were Ukrainians. MinLab data point at ca 450 ths. hires among Ukrainian war refugees (~60% of working age population).
- P.Borys (CEO of PFR - state investment fund) said that the scale of PFR-prefinanced projects performed under NGEU (Recovery and Resilience Plan) will amount to ca. PLN 6-7 bln in 2022 and PLN 20 bln in 2023. In the case of the absence of the EU funds, the programme is to be financed from the repayments of Covid-19 aid to businesses.
THE WEEK AHEAD:
- Current account balance could once again show some improvement due to deceleration of imports, boosted previously by the build-up of inventories. Final CPI data for August should confirm the flash result (16.1% y/y vs 15.6% y/y in July). The core CPI inflation has probably accelerated to nearly 10% y/y after two months of falling momentum (% m/m sa).
NUMBER OF THE WEEK:
- 72.9% y/y – the decline of demand for property loans to households according to Credit Information Bureau, the strongest in the data history (2007).