According to Patkowski, "the introduction of the shields may prevent inflation reaching a double-digit level or remaining at such a level for several months."
The Polish government anti-inflation shields will trim the annual average inflation by close to 2 percentage points this year, a deputy finance minister has said in a response to an MP’s question.
The Polish government has introduced “anti-inflation shields”, or a set of tax cuts and subsidies for low earners that will be in force for up to six months. The move is aimed to mitigate the negative effects of rising inflation on society.
“The shields will lower inflation in January-July 2022 as compared to a base scenario assuming no such measures,” Piotr Patkowski, a deputy finance minister, wrote.
“It is estimated that the annual average inflation in 2022 can be lower by close to 2 percentage points… compared to the base scenario,” the deputy minister added.
However, this will come at a price as the shields will increase Poland’s CPI level by 2 percentage points in 2023, Patkowski warned.
According to Patkowski, “the introduction of the shields may prevent inflation reaching a double-digit level or remaining at such a level for several months.”
The Polish central bank’s Monetary Policy Council started raising interest rates in October and will likely continue rate hikes as the reference rate is now at just 2.25 percent, far below December’s inflation level of 8.6 percent.
The Polish central bank’s official inflation target is 2.5 percent, plus/minus 1 percentage point.
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