The divergent views among policymakers at the National Bank of Poland (NBP) make it increasingly difficult to tell whether the central bank’s tightening cycle is coming to an end. Our central view is that the NBP will opt for a final 25bp hike in the cycle next week. But a larger hike is a clear risk and we think there is a growing chance of further hikes over the coming months too. Meanwhile, Benjamin Netanyahu’s right-wing Likud party won Israel’s election this week. One risk that seems to be underappreciated is that the government fails to use its majority to push through reforms that are needed to lift trend growth.
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