NBP keeps interest rates unchanged

On 8-9 May 2024 the Monetary Policy Council (MPC) held a decision-making meeting, at which it decided to the keep the NBP interest rates at the following levels:

The May session of Poland's rate-setting authority was the seventh in a row with the NBP interest rates kept unchanged.

"The economic conditions in the environment of the Polish economy remain weakened. ... Uncertainty about the activity outlook in the largest economies persists," the MPC

The Council added in Poland "the process of disinflation continues". "Inflation is driven down by the reduction of cost pressures reflected in falling producer prices, and by the weak growth in activity. In many economies core inflation also declines, although it is still elevated."

"The Council judges that the decrease in inflation is supported also by the appreciation of the zloty exchange rate, which is consistent with the fundamentals of the Polish economy," we read.

However, the MPC added, inflation developments in the coming quarters are "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 might increase significantly in the second half of 2024. Alongside that, over the medium term, demand pressure in the economy will be stimulated by a marked wage growth, stemming i.a. from wage increases in the public sector.

"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 statement said.