Warsaw - Arabstoday
Poland’s soaring retail sales will strengthen the case for monetary tightening in the months ahead and the central bank could discuss an interest rate increase as soon as its next policy sitting on April 3-4. Statistics office data on Monday showed retail sales jumped by 13.7 per cent last month, much above forecast, largely fuelled by sales of motor vehicles, furniture and appliances, as well as fuels and consumption in non-specialised stores. The data showed that the economic outlook of the European Union’s biggest eastern economy remains solid and confirmed its position as one of the fastest growing members of the bloc. It is my conviction that April is an appropriate moment (to raise rates), Monetary Policy Council (MPC) member Adam Glapinski told the state news agency PAP. It’s difficult to say whether it will happen. We will be discussing it. The refusal of Poland’s economy to slow down significantly along with its regional peers and amid the raging euro zone debt crisis has helped inflation stay above the central bank’s 2.5 per cent target. But a second council member, Anna Zielinska-Glebocka, was quoted as saying on Monday that the bank would not cut interest rates as analysts and markets expect and that policymakers would leave borrowing costs unchanged at best. The central bank’s MPC meets next week to discuss interest rates and the ten-strong panel is widely expected to hold fire, leaving the key rate at 4.5 per cent. Zielinska-Glebocka, speaking to the daily Rzeczpospolita, said the central bank had to keep in mind helping the economy but added that the economic slowdown would be modest this year. Poland is the only EU economy to have avoided recession since 2008, growing 4.3 per cent in 2011 helped by its large consumer base of 38 million and a weakening of the free-floating zloty. The recent recovery of the currency from an 11 per cent drop last year should ease concerns about imported inflation from higher world fuel prices but inflation remained at 4.3 per cent in February, way above the bank’s target.