Poland Monetary Policy July 2019


Poland: Central Bank holds its ground in July as expected

July 3, 2019

The National Bank of Poland (NBP) kept the reference rate unchanged at a record low of 1.50% at its 2–3 July monetary policy meeting, as had been widely expected. In addition, the Central Bank held the Lombard rate stable at 2.50%, the deposit rate at 0.50% and the rediscount rate at 1.75%. The Bank ended an easing cycle in March 2015 and has stood pat since then.

Moderate inflation and the European Central Bank’s loose monetary policy stance were again behind the Bank’s decision. Although headline inflation hit an over six-year high of 2.6% in June, largely due to rising food prices, inflation remained well within Central Bank’s target range of 2.5% plus or minus 1.0 percentage point. Meanwhile, surging retail sales and industrial production in April-May suggest economic momentum carried into the second quarter, underpinned by a tight labor market, swiftly rising wages and robust investment activity on the back of rising inflows of EU funds.

Looking ahead, the Bank projects GDP growth to ease and expects inflation to remain close to the target in the coming months. Consequently, FocusEconomics analysts see the Bank keeping the rate unchanged this year, as it balances higher inflation with weaker external demand and the ECB’s loose monetary stance.

The next monetary policy meeting is scheduled for 10–11 September.

FocusEconomics Consensus Forecast analysts expect the reference rate to end 2019 at 1.50%. For 2020, the panel sees the rate ending the year at 1.69%.

Author: Massimo Bassetti, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy July 2019 1

Note: NBP Reference Rate in %.
Source: National Bank of Poland (NBP).

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