NBP MPC Press Release - 2012-03-07
Central bank: nbp | Type: decision | Date: 2012-03-07

National Bank of Polan d 
Monetary Policy Council 
 
 
00-919 Warszawa, ul. Świ ętokrzyska 11/21, phone (22) 653 28 88, fax (22) 653 13 28 
 
 
Warsaw, 7 March 2012 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 6-7 March 2012 
The Council decided to keep the NBP interest rates unchanged, i.e.: 
 reference rate at 4.50% on an annual basis; 
 lombard rate at 6.00% on an annual basis; 
 deposit rate at 3.00% on an annual basis; 
 rediscount rate at 4.75% on an annual basis. 
Global economic growth remains low. Accelerati on in GDP growth in the United States is 
accompanied by a recession in the euro area and a slowdown in most major emerging 
economies. At the same time, since the previ ous meeting of the Council selected leading 
indicators have improved, what points to possi ble stabilization of economic activity in some 
countries. Yet, global economic growth is being hampered by the ongoing process of 
adjustments in the balance sheets of enterprises and households in some developed countries. 
Inflation abroad remains heightened, although is gradually declining. High commodity prices, 
including crude oil prices, which have been recently on the rise again, are one of the main factors 
behind elevated inflation. Uncertainty related to the sovereign debt crisis in some euro area 
countries has persisted. 
The Council got acquainted with the projection of inflation and GDP prepared by the Economic 
Institute of the NBP, being one of the inputs to the Council’s decisions on the NBP interest rates. 
The March inflation and GDP projection implies th at GDP growth will decelerate in the coming 
quarters and – following global economic recovery – will start to rise again in mid-2013. At the 
same time, inflation will be gradually declining, coming close to the inflation target in late 2013. 
In line with the March projection based on data available up to 24 January 2012 (cut-off date for 
the projection) – under the assumption of constant NBP interest rates – there is a 50-percent 
probability of inflation running in the range of 3.6-4.5% in 2012 (compared to 2.5-3.9% in the 
November projection), 2.2-3.6% in 2013 (as against 2.2-3.7%) and 1.2-3.0% in 2014. In turn, 
with a 50-percent pr obability the March projection sees th e annual GDP growth in the range of 
2.2-3.8% in 2012 (compared to 2.0-4.1% in th e November projection), 1.1-3.5% in 2013 (as 
against 1.5-4.0%) and 1.9-4.4% in 2014. Info rmation incoming after 24 January 2012, including 
in particular lower than expected inflation in January and significant zloty appreciation, allow for 
the assessment that CPI inflation in 2012 and 2013 will be lower than indicated in the March 
projection of Economic Institute by respectively 0.3-0.4 and 0.2-0.3 percentage points. 
Data on 2011 Q4 GDP in Poland as well as data on output and retail sales in the early 2012 
indicate that economic growth has remained r obust. However, relatively low level of most 
leading business indicators suggests that economic activity may weaken in the coming quarters. 
2 
 
In 2011 Q4, the number of the employed in the economy increased. At the same time, however, a 
rise in the number of the economically active contributed to a higher unemployment rate, which 
continues to curb wage growth in the economy. The s ubstantial acceleration of wage growth in 
enterprises observed in January 2012 was probably due to te mporary factors. Lending to 
corporates continued to increase . Yet, there was a decrease in le nding to households in January, 
which was the result of further decline in co nsumer loans and slower growth in mortgage 
lending. 
According to preliminary GUS data, in Janua ry 2012 the annual CPI de creased to 4.1%, though 
remaining markedly above the NBP's inflation ta rget of 2.5%. NBP estim ates also point to a 
substantial decline in core inflation. In turn, inflation expectations of households and financial 
sector analysts – despite some improvement – remained elevated. Also growth of producer prices 
remained elevated. 
In the opinion of the Council, in the short term inflation – despit e some expected decline – will 
probably remain above the NBP's inflation target. Heightened inflation will be supported by the 
previously observed zloty depreciation and pers istently high commodity prices, which may lead 
to further rise in energy prices. 
In turn, in the medium term, in flation will be curbed by the e xpected deceleration of economic 
growth amid moderate wage growth as well as continued fiscal tightening. The zloty 
appreciation at the beginning of 2012 will also be conducive to lower inflation. 
The Council decided to keep the NBP interest rates unchanged. The Council does not rule out the 
possibility of further monetary policy adjustme nts in the future, should the positive signs of 
economic activity in Poland continue and the outlook for inflation returning to the target fail to 
improve. 
The Council has adopted the Inflation Report - March 2012.