National Bank of Poland

October 6, 2015

Narodowy Bank’s seven-day reference rate was left at 1.5% following the latest Monetary Policy Council meeting.  It was reduced by 50 basis points in March 2015, this year’s only modification.  Nine earlier cuts from November 2012 through January 2014 reduced the rate from 4.75% to 2.0%. 

Like many other economies, on-year CPI and PPI inflation are negative in Poland.  In a released statement, the price situation is explained: “Deflation has deepened mainly due to falling commodity prices in global markets. Amidst moderate wage growth, this contains the risk of increasing cost pressure. Inflation expectations are still very low.”  Growth is expanding just moderately, and price growth is expected to rise slowly in coming quarters as the output gap closes.  That’s the baseline view, but risks are skewed downward:  “Persisting risk of stronger economic slowdown in the emerging market economies, low commodity prices and weaker inflation outlook abroad result in increased uncertainty about the pace of inflation returning to the target.”  No urgency to begin raising interest rates exists.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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