By Anna Koper
WARSAW (Reuters) - Poland is approaching the end of its monetary policy tightening cycle, the central bank governor said on Thursday, as he warned of threats to growth from the war in Ukraine and forecast falling inflation in 2023.
The National Bank of Poland (NBP) hiked its main interest rate by 75 basis points to 6.00% on Wednesday, bringing the cost of credit to its highest level since 2008.
The largest economy in the European Union's eastern wing has raised its main rate by a combined 590 basis points since the cycle began in October, piling pressure on mortgage holders in a country where variable rates are the norm and forcing the government to step in and help borrowers.
"At the moment we are gradually approaching the end of our rate hike cycle," Adam Glapinski told a news conference.
The Polish zloty slipped after Glapinski's comments and was 0.36% weaker on the day at 1500 GMT.
Glapinski did not say when the rate hike cycle would finish, but he said that rates could start to fall in the fourth quarter of 2023.
Rafal Benecki, chief economist at ING in Poland, said the more dovish tone was "worrying".
"Glapinski talks about cuts, while it is difficult to notice an improvement in inflation risks," he wrote in a note to investors.
Inflation in Poland has surged to levels not seen since the late 1990s, as the disruption to global supply chains caused by Russia's invasion of Ukraine has added to price pressures caused by tight labour markets and a strong rebound from the COVID-19 pandemic.
However, Glapinski said he expected inflation to fall to around 6% in 2023, a significant decrease from the 13.9% seen in May but still above the central bank's target range of 1.5%-3.5%.
"If the current circumstances do not change, then inflation will be under control... and it will be in a downwards trend," he said.
Glapinski also said that he expected growth to slow, in part due to the impact of the war in Ukraine, potentially falling below 3% in 2023 from 4.0%-4.5% this year.
(Reporting by Alan Charlish, Anna Koper, Pawel Florkiewicz, Anna Wlodarczak-Semczuk; Editing by Andrew Heavens and Hugh Lawson)