We are facing higher inflation, which we do not have to be afraid of - says Dr Wojciech Paczos

Wojciech Paczos of Cardiff University, in an interview with Bankier.pl, stated that prices of products and services on the market will continue to rise, [...] https://www.pinterest.com/pin/1085437947660215829/

Wojciech Paczos of Cardiff University in an interview with Bankier.pl said that prices of products and services on the market will continue to rise, but we do not have to worry about it. The higher inflation that awaits us should supposedly be acceptable. Surprised? But why is the expert of this opinion? He explains later in the interview. Higher inflation ahead - Over the next two years, we will see higher inflation in Poland - says Dr Wojciech Paczos of Cardiff University. We all know this already. But should the National Bank of Poland do something about it? The expert is of the opinion that it should not. - In order to reduce inflation using classical methods, demand should be reduced. And this, in the current situation of the Polish economy, would be a fatal, gigantic and dramatic economic policy mistake - he said. He goes on to advise the NBP on what it should do now. - We have a very bad situation in which the NBP should not raise interest rates, as this would mean limiting the already weak demand. In the current Polish situation, an increase in interest rates, which would result in a decrease in GDP and an increase in debt, would be a greater threat to financial stability than rising inflation. We know from research that double-digit inflation is a threat, as it is then completely out of control. So far, I do not see any risk that the inflation rate in Poland will exceed 10 percent, while single-digit inflation is manageable and can be controlled," the economist added. Why shouldn't we worry? The expert also says that the NBP's latest policy from the beginning of the crisis was necessary. However, it increased the national debt. Obviously, higher inflation is now in the interest of the state, as it somehow reduces the debt. The problem arises, however, when we look at the micro sphere and the situation of Poles with larger savings. The latter will now, in practice, melt down, as the Polish zloty will probably continue to lose value. For now, in fact, we are not threatened by inflation at a level exceeding 10 percent. The question is what will happen in 2-3 years. Certainly, the more cautious ones are already investing in safe haven... Tags prices inflation money