Poland Monetary Policy May 2019


Poland: Central Bank stays put at May meeting

May 15, 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 14–15 May 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.

The Bank’s decision came against a backdrop of unremarkable inflation, softening economic activity and the European Central Bank’s loose monetary policy stance. Intensifying price pressures on the back of rising oil prices were reflected by April’s data on headline inflation, which hit an over one-year high but remained below the midpoint of the Central Bank’s target range of 2.5% plus or minus 1.0 percentage point. Meanwhile, a preliminary release for Q1 national accounts shows economic growth eased, albeit less than expected by markets, 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 moderate level in the coming months. That said, FocusEconomics analysts expect the Bank to keep the rate broadly stable 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 4–5 June.

FocusEconomics Consensus Forecast analysts expect the reference rate to end 2019 at 1.55%. For 2020, the panel sees the rate ending the year at 1.92%.

Author: Massimo Bassetti, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy May 2019

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

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