PROF. DR. HAB. KONRAD RACZKOWSKI: FURTHER INTEREST RATE HIKES WOULD LEAD TO RECESSION

Director of the Center for the World Economy, Prof. Konrad Raczkowski, in a commentary for Business Insider, assesses that further interest rate hikes, with sudden and ill-considered new proposals to tax windfall profits, among other things, is another element contributing to the coiling of the capital market and stock market.

Prof. Raczkowski notes that the effect of higher interest rates is all too evident in Poland, where a large proportion of companies have cut investment by two-thirds. Moreover, he points out that the interest rate hikes have had a strong effect. Demand for mortgages in August of this year fell 68.8 percent year-on-year, and Poles have overwhelmingly already lost their creditworthiness. The mortgage market is working, but practically at a standstill, indicating that the space for an interest rate hike has been exhausted.

Indebted households are finding it harder and harder to make ends meet, an alarming sign of which is the rise of non-bank financing. Additionally, energy self-sufficiency, or lack thereof, will be an indicator of a mild or much deeper recession in Europe. Goldman Sachs estimates that European households alone will see their electricity bills rise by an astronomical $2 trillion by 2023.

You can read the entire article at:

https://businessinsider.com.pl/gospodarka/dalsze-podwyzki-stop-procentowych-doprowadzilyby-do-recesji-oto-dlaczego-opinia/cj1vb3n.amp