Adam Glapiński held a press conference on Thursday, a day after the NBP’s Monetary Policy Council kept all interest rates unchanged for the fifth time running, following two consecutive cuts in September and October 2023. The reference rate is now still at 5.75%.

“We are probably at the inflation target, we will see what data comes in,” Glapiński said. “We have managed to get to the target we have been trying to achieve for a long time,” he added.

“We have gone from 18.4% to close to 2.5%, we are certainly in the band of deviations,” he said, adding that inflation is still in a downward trend.

Risk factors

However, he also pointed to some risks of inflation picking up.

First, the government’s potential move to reinstate the 5% VAT rate on basic foodstuffs could boost the Consumer Price Index (CPI) by 0.9 percentage points, according to Glapiński.

In an even grimmer scenario, the CPI could soar to 8% if the government removed “all anti-inflation shields” in the second half of the year, he said.

Additionally, if the GDP growth exceeded 3%, this would be another factor increasing inflation, according to the central bank governor.