Interest rates left unchanged for 8th month in a row

The June session was the eighth in a row with interest rates kept unchanged by the MPC.

The Monetary Policy Council decided to keep the NBP interest on the following levels:

The main, reference interest rate stands at the moment at 5.75% and has been kept at this level since October 2023, when the MPC decreased the rates by 25 basis points. Earlier on, in September 2023, the rates were decreased by 75 basis points.

In the statement published following the June session, the MPC said that "incoming data indicate that despite the observed economic recovery, demand and cost pressures in the Polish economy remain low, which amidst weakened economic conditions and lower inflation pressure abroad curbs domestic inflation".

The Council assessed that annual CPI growth in Q2 of 2024 "will run at the level consistent with the NBP inflation target".

"This will be accompanied by lower than in the previous quarters inflation net of food and energy prices, although – due to elevated growth in services prices – it will stay above the CPI inflation," we read.

According to the MPC, "inflation developments are, however, associated with substantial uncertainty, related i.a. to the impact of fiscal and regulatory policies on price developments, including on inflation expectations, as well as to the pace of economic recovery in Poland and labour market conditions".

"Should energy prices be raised, inflation will increase in the second half of 2024."

"Against this background, the Council decided to keep the NBP interest rates unchanged. The Council judges that the current level of the NBP interest rates is conducive to meeting the NBP inflation target in the medium term," the MPC concluded.

According to the Statistics Poland flash estimate, annual CPI inflation in May 2024 was 2.5%, against 2.4% in April 2024.