POLAND: MPC's Kotecki Says Rising Transportation Costs May Force Policy Reaction
* Asked about rising fuel prices, MPC's Ludwik Kotecki told RMF FM that headline inflation will likely accelerate beyond +4% Y/Y already in October. Against this backdrop, 'we will likely be raising the cost of money in the economy'. He clarified that the MPC's October meeting will likely see a 'warm up' before a serious discussion on the matter, while the release of the triannual inflation projection makes November an appropriate moment to take action, should the new forecast show that the inflation target overshoot will be sustainable. He said that if the MPC does decide to hike rates, it will probably not be a one-off, but the panel will move in small increments. Kotecki said that Poland does not have a problem with excessive demand, but 'the problem today is how oil, petrol and gas prices affect the prices of other goods and services'. * President Karol Nawrocki signalled that he will block 'unconstitutional' draft legislation imposing a windfall tax on fuel companies from becoming law. This was the government's second attempt to legislate for a windfall tax after an earlier bill had been sent for constitutional review by the President on similar grounds. Prime Minister Donald
* Asked about rising fuel prices, MPC's Ludwik Kotecki told RMF FM that headline inflation will likely accelerate beyond +4% Y/Y already in October. Against this backdrop, 'we will likely be raising the cost of money in the economy'. He clarified that the MPC's October meeting will likely see a 'warm up' before a serious discussion on the matter, while the release of the triannual inflation projection makes November an appropriate moment to take action, should the new forecast show that the inflation target overshoot will be sustainable. He said that if the MPC does decide to hike rates, it will probably not be a one-off, but the panel will move in small increments.
Kotecki said that Poland does not have a problem with excessive demand, but 'the problem today is how oil, petrol and gas prices affect the prices of other goods and services'. * President Karol Nawrocki signalled that he will block 'unconstitutional' draft legislation imposing a windfall tax on fuel companies from becoming law. This was the government's second attempt to legislate for a windfall tax after an earlier bill had been sent for constitutional review by the President on similar grounds. Prime Minister Donald Tusk had signalled that proceeds from the tax would allow the government to finance the reinstatement of fuel relief measures through the end of this year.
* Measures to contain elevated fuel prices have become another site of conflict between the Presidential Palace and the government amid their difficult cohabitation, with each side willing to claim credit for success. Political deadlock has translated into an ongoing blame game over rising prices at the pumps. * MPC's Marcin Zarzecki decried political impasse over the process to fill vacancies on the NBP's Management Board, a body separate from the MPC and responsible for running the central bank's day-to-day operations. The number of Board members is set to drop below the statutory minimum in November, which would take the NBP into a legal grey area.
pl that stakeholders should prevent the NBP's 'paralysis'. * Poland continues to push for the establishment of a permanent US military base on its territory amid repeated suggestions that negotiations have entered the final straight. President Karol Nawrocki told Bloomberg a decision is 'just a question of time' and he would like a 'Fort Trump' to be constructed by the end of his US counterpart's term in 2029.
Warsaw doubled down on efforts to seal the deal after Russia's full-scale invasion of Ukraine, as permanent rather than rotational US military presence is seen as a powerful deterrent, even as a potential base would likely be located in the western part of the country. * The Finance Ministry is looking to sell PLN7bn-12bn of debt across six POLGB series at today's auction. 25% fixed-rate bonds (DS0436).