Inflation is supposed to be the central banker's first worry. A Polish rate setter just put growth in front of it.
Henryk Wnorowski, a member of Poland's Monetary Policy Council, said the bigger threat to the country is the Iran war's hit to growth - and that any move on rates needs to wait.
Why Growth Moved To The Top Of The List
Poland's economy is roughly the size of Switzerland's, a $1 trillion machine that depends heavily on European demand and on imported energy.
Both of those got harder to forecast the moment the Middle East conflict escalated, which is what shifted Wnorowski's framing.
He told Bloomberg the central bank should avoid hasty decisions, warning that any tightening from here would put extra weight on an economy already trying to absorb an outside shock.
That is a notable shift from the usual central bank script, where inflation almost always wins the tiebreaker over growth concerns.
It also lines up with comments from fellow MPC member Marcin Zarzecki, who has signaled Poland may simply hold rates steady for as long as the war lasts.
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Inflation Is Still A Problem, Just Not The Biggest One
Wnorowski did not say inflation has been solved, only that it is no longer the variable he is most worried about.
Poland's disinflation has been moving in the right direction over the past year, with headline price growth slowly stepping down from earlier highs.
Services prices have been sticky and that keeps the central bank cautious, but the new external shock from oil has the potential to dent growth faster than it lifts inflation.
Three options on the table:
- A hold protects the economy and signals patience.
- A cut risks adding fuel to imported inflation if oil keeps climbing.
- A hike risks crushing already-fragile demand and household spending.
That is the math the MPC is now working through, and Wnorowski's comments suggest a hold is the most likely outcome at the next meeting.
What To Watch
Poland's next rate decision will be a tell on which risk the council is weighing more heavily, with markets currently betting on no change.
The zloty has been steady against the euro, which gives the central bank some breathing room compared to peers with weaker currencies.
Wnorowski just told everyone why the bank is in no rush to move.
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