Poland Monetary Policy June 2019


Poland: Central Bank holds its ground in June

June 5, 2019

As widely expected by market analysts, the National Bank of Poland (NBP) kept the reference rate unchanged at a record-low of 1.50% at its 4–5 June monetary policy meeting. In addition, policymakers held the Lombard rate unchanged at 2.50%, the deposit rate at 0.50% and the rediscount rate at 1.75%. The Central Bank ended an easing cycle in March 2015 and has stood pat since then.

Unremarkable inflation and the European Central Bank’s loose monetary policy stance were behind the Bank’s decision. Although stronger price pressures fueled by rising oil and food prices were reflected by May’s data on headline inflation, which hit a one-and-a-half-year high, inflation remained below the midpoint of the Central Bank’s target range of 2.5% plus or minus 1.0 percentage point. Meanwhile, Q1’s national accounts show economic momentum was maintained in the first quarter, with growth easing only marginally, buttressed by buoyant consumer spending and strong investment activity.

Looking ahead, the Bank projects GDP growth to moderate further and sees inflation staying at a modest level in the coming months. Therefore, FocusEconomics analysts expect the Bank to keep 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 2–3 July.

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 May 2019 0

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

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