Polish central bank sees bump in inflation between now and mid-2009

WARSAW (Thomson Financial) - Poland's central bank said today it would continue to act to curb inflation as the gap between wage and productivity growth widens and price rises exceed earlier expectations between now and the middle of next year.

The bank earlier raised interest rates by 25 basis points for a second consecutive month in a decision analysts had seen as too close to call after a series of surprises on the high-side from January economic data.

The bank said in its post-meeting statement that its new quarterly projection showed 'significantly higher' price growth between now and the middle of 2009 than the last projection in October.

But it also said the new projection, which assumed unchanged interest rates, showed similar inflation for the second half of next year.

It said the projection showed a 50 pct chance of inflation of 3.6-4.7 pct in 2008, compared to 2.2-3.5 pct in October, and 2.6-4.9 pct in 2009 versus an earlier 2.5-4.6 pct.

Source: By Paweł Sobczak, forbes.com