Jakub Rybacki said: "The large scale of reductions is surprising. We expect this to be the last such decision this year. We forecast further changes only in 2024."

Mateusz Marek/PAP

An expert from the think tank the Polish Economic Institute (PIE) has called Wednesday’s interest rate cuts “surprising”, adding that that by the end of next year rates would fall to around 5.25 percent

Poland’s central bank’s rate setting Monetary Policy Council (RPP) cut all interest rates by 0.75 percentage points on Wednesday, bringing the reference rate, in particular, down to 6 percent.

Jakub Rybacki said: “The large scale of reductions is surprising. We expect this to be the last such decision this year. We forecast further changes only in 2024.”

He explained that when deciding on interest rates, the RPP will take into account the level of inflation and the state of the economic situation but “both factors give contradicting signals”.

He said that while the previous decline in inflation was fast the rate will now slow.

“High uncertainty accompanies energy prices in particular – crude oil becomes more expensive after OPEC+ decisions, and the gas market is unstable despite the fact that storage facilities are full. In such conditions, the room for lowering interest rates is small,” he said.

Rybacki added that PIE expects further reductions in interest rates, and predicted that at the end of 2024, rates will fall to around 5.25 percent”.