Poland Monetary Policy


Poland: NBP again keeps reference rate at record low of 1.50%

December 2, 2015

The National Bank of Poland (NBP) decided to keep its reference rate at the record low of 1.50% at its 1–2 December monetary policy meeting. The decision matched market expectations and marked the seventh consecutive time that the NBP has left the rate unchanged.

In its accompanying statement, the NBP reaffirmed that the global economy is growing moderately. According to the Bank, growth moderated in both the Euro Area and the US in Q3. However, these economies are still expected to recover steadily, as confirmed by the most recent indicators. Meanwhile, China’s economic performance continued to deteriorate in Q3, although the latest indicators point to a stabilization, and Russia and Brazil are still in recession. Consequently, concerns over weaknesses in developing countries and thus uncertainty regarding global demand remain significant.

On the domestic front, the Bank commented that, “stable economic growth continues. In 2015 Q3 GDP rose slightly faster than in the previous quarter. Consumer demand remains the main driver of economic growth, supported by robust labour market, strong consumer sentiment and increasing household lending.”

The Bank stated that falling commodity prices in recent months have kept inflationary pressures muted. In addition, a negative output gap and moderate nominal wage growth are contributing to the lack of cost pressure, and, consequently, inflation expectations remain subdued.

Finally, the Bank concluded that, “price growth will slowly increase in the nearest quarters, supported by the gradual closing of the output gap amidst improving economic conditions in the euro area and the favourable domestic labour market developments. At the same time, the risk of a sharper slowdown in the emerging market economies and the impact this may have on global economic activity, as well as the possibility of commodity prices persisting at low levels, and as a result, low inflation in the environment of the Polish economy, remain the sources of uncertainty about the pace of inflation returning to the target.”

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2016 at 1.53%. For 2017, the panel sees the rate ending the year at 1.62%.

Author:, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy November 2015 0

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

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