It took three years, but in late 2011 Poland finally botched up and went the way of the majority of countries, letting NGDP fall way below trend. They didn´t (correctly) react to the 2007-08 oil price rise, like the US, UK, EZ, etc. and fared well, but didn´t resist when oil prices picked up again in 2010-11, when, among the initial group, only the ECB was dumb enough to react.
Annual price growth dropped below zero in July, starting Poland’s longest stretch of deflation since the statistics office started publishing monthly price data in the 1980s. Consumer prices dropped 1.3 percent in January from a year earlier, deepening their 1 percent decline in December.
Inflation has undershot the central bank’s 2.5 percent target for 26 months and has been below the lower bound of its 1.5 percent-3.5 percent tolerance range for two years.
Winiecki said “it’s quite possible” that sustained deflation or below-target inflation may prompt the next Monetary Policy Council, which takes office in early 2016, to consider “whether it makes sense” to keep targeting price growth at 2.5 percent.
“It’s probably impossible to achieve this CPI target, and I don’t see anything changing this for another decade or so,” Winiecki said.
As the Oscar-winning editorial punch line from the Guardian said:
If that is the analysis, though, then it really is time to retire the target, and move to another that is in line with the real objectives. For when chancellors cheer at their own targets being missed, then, instead of strategic economic direction, we are left with aiming in the dark.