National Bank of Poland Keeps Key 1.5% Interest Rate and Adopts New Macroeconomic Forecasts

March 11, 2016

Poland’s monetary policy interest rate was cut from 4.75% to 2.5% between November 2012 and July 2013, reduced by a further 100 bps in two increments during the first quarter of 2015, but not changed subsequently.  The statement released after the latest policy meeting said this about inflation:

Price growth will remain negative in the coming quarters due to the earlier strong fall in global commodity prices. At the same time, a gradual increase in core inflation is expected. It will be supported by stable economic growth, including an anticipated rise in consumer demand growth driven by rising employment, forecasted acceleration of wage growth and an increase in social benefits.  This notwithstanding, the downside risks to the global economic conditions are a source of uncertainty for the domestic economy.

Projected ranges of CPI inflation, with probability of 50%, were revised downward to –0.9% to +0.2% for the current year and 0.2-2.3% in 2017, and the forecast was extended into 2018 when inflation is initially put at 0.4-2.8%.  Led by domestic demand, real GDP is expected to expand 3-4.5% in 2016, 2.6-4.8% next year and 2.1-4.4% in 2018.  The output gap is negative, and wages are climbing only moderately.  The statement concludes that the current one-year-old policy stance is still sustaining growth and macroeconomic balance.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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