Poland's central bank is expected to be the first to raise interest rates in 2022. According to Bloomberg analysts, there is no doubt that after having strongly revised upwards its inflation projections, this Tuesday the institution will decide on an increase in key interest rates.

Of the 17 economists consulted by Bloomberg, 15 expect a 50 basis point hike in the key interest rate, to 2.25%, and two anticipate a 75 basis point strengthening, which would leave the rate at 2.5%. Monetary policy decisions will be adopted this Tuesday, but not until tomorrow, Wednesday, will Governor Adam Glapinski hold a press conference to explain the central bank's choices.

Poland's central bank already started raising interest rates last year. In the last three monetary policy meetings it has raised the key rate three times, but still lags behind Hungary or the Czech Republic, which have been even more aggressive in their measures to curb inflation.

To this end, Governor Adam Glapinski already warned last week that further interest rate increases would be needed to curb rising prices. According to the institution's projections, inflation will peak in June and should exceed 8%.

As in the rest of Europe, prices are being pressured by energy - in Poland in particular by escalating natural gas prices - and there has been resistance to raising interest rates earlier for fear of a setback in the economic recovery as the health outlook is worsened by the omicron variant of covid-19.

The difference is that the Polish monetary policy board expects inflation to remain very high throughout this year - which is not the case with the European Central Bank, which expects a pullback starting in the second half of 2022.