Poland Monetary Policy


Poland: NBP keeps reference rate unchanged for the second consecutive month

December 4, 2014

The National Bank of Poland (NBP) kept its reference rate unchanged at 2.00% at its 2–3 December monetary policy meeting. The decision was in line with market expectations and marked the second consecutive month in which the Bank decided not to make changes to its policy rate.

In its accompanying statement, the Bank pointed out that global economic growth remains moderate. According to the Bank, the U.S. economy continues to show robust performance, while growth in the Euro area remains subdued. Regarding emerging markets, both China and Russia have also been showing weak performance. On the domestic front, the NBP noted that economic activity moderated slightly in the third quarter, mainly due to weaker growth in the external sector. Meanwhile, industrial production and construction remained weak in October. Despite the moderation registered in Q3, the Bank considers that the domestic economy is still growing at a good pace, hovering around 3.0% and 3.5% during the last two quarters, and that the economic outlook remains fairly stable.

Regarding inflation, the Bank stated that consumer prices declined 0.6% on annual terms in October, which reflected low global commodity prices, as well as sluggish domestic demand.

The decision to maintain the reference rate unchanged was mainly due to the fact that the Bank believes that the low inflation figures are mainly driven by temporary external factors, and, to a much lesser extent, by domestic sources. As the Bank pointed out, “the October adjustment of monetary policy and the stable, despite some slowdown, economic growth limit the risk of inflation remaining below the target in the medium term.” In the press conference following the meeting, NBP President Berka pointed out that the Bank was taking a more flexible approach to inflation targeting, focusing more on economic growth than on inflation figures. Moreover, he emphasized that the Monetary Council would be more tolerant of low inflation driven by external sources, and that it would be more tolerant to too low inflation than high inflation.

Finally, the Bank acknowledged that some uncertainty about the Polish economic environment persists. Therefore, “if the incoming data confirm a slowdown in economic activity, and weak growth in the environment of the Polish economy persists, the Council does not rule out further adjustment of monetary policy.”

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2014 at 1.92%. For 2015, the panel sees the rate ending the year at 1.96%.

Author:, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy December 2014 0

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

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