중동부유럽

Abstract

FORECASTING INFLATION IN POLAND1

Inflation in Poland has stayed below the lower bound of the target band for about two years with external shocks adding to downward pressure during 2014. Alongside, inflation developments have been increasingly disjoint from the gradual narrowing of the output gap, while declining inflation expectations suggest that indirect and second-round effects from low inflation may be taking hold. Forecasting inflation in the context of persistent low inflation requires a set of complementary analytical tools. To help inform monetary policy advice, we explore the drivers of inflation and forecast inflation using several different models, allowing also for indirect and second-round effects. Under a no-policy-change scenario, the models point to a protracted period of low inflation, despite continued growth momentum.