NBP MPC Press Release - 2024-04-01
Central bank: nbp | Type: decision | Date: 2024-04-01

Warsaw, 4 April 2024
Information from the meeting of the Monetary Policy Council
held on 3-4 April 2024
The Council decided to keep the NBP interest rates unchanged:
▪ reference rate at 5.75%;
▪ lombard rate at 6.25%;
▪ deposit rate at 5.25%;
▪ rediscount rate at 5.80%;
▪ discount rate at 5.85%.
The economic conditions in the environment of the Polish economy remain weakened.
Incoming data indicate that in the euro area in 2024 Q1, the annual GDP growth continued
to be low and in Germany it was probably again negative. Meanwhile, in the United States,
the economic conditions stayed favourable. Uncertainty about the activity outlook in the
largest economies persists.
In the environment of the Polish economy 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 economic activity. In many economies core inflation also declines,
although it is still elevated.
In Poland incoming data indicate an increase in economic activity growth in early 2024. In
January and February the a nnual growth rates of retail sales and industrial production
were markedly positive. At the s ame time, the construction and assembly production
decreased in annual terms. The labour market situation remains good and unemployment
is low. Although the number of working persons continues to be high, employment in the
enterprise sector in February 2024 was lower than a year ago. At the same time, the annual
wage growth was higher than in the late 2023.
According to the Statistics Poland flash estimate , annual CPI inflation in March 2024
declined to 1.9% (from 2.8% in February 2024). The decrease of inflation in annual terms
was driven mainly by a weaker growth in prices of food and non-alcoholic beverages as
well as – albeit to a lesser extent – of non-food products and services. In turn, the annual
growth of energy prices increased slightly. Considering the Statistics Poland data, it can
be estimated that core inflation significantly decreased again in March 2024. In February
2024, the annual fall in producer prices remained deep, which confirms the fading of most
external supply shocks and a reduction of cost pressures. Together with the relatively low
– although somehow accelerating – economic activity growth, it is conducive to a decline
in inflation. The Council judges that t he decrease in inflation is supported also by the
appreciation of the zloty exchange rate, which is consistent with the fundamentals of the
Polish economy.
In the Council’s assessment, 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 falling inflation pressure abroad supports lower
domestic inflation. As a result, it is expected that in the coming months annual CPI growth
will run at the level consistent with the NBP inflation target , however, restoring higher
VAT on food products will act toward the rise in inflation. This will be accompanied by
the gradual decline in core inflation, although core inflation will stay above CPI inflation.
In subsequent quarters, inflation developments are, however, associated with substantial
uncertainty, related in particular to the im pact of fiscal and regulatory policies on price
developments, as well as 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 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.
Further decisions of the Council will depend on incoming information regarding
prospects for inflation and economic activity.
NBP will continue to take all necessary actions in order to ensure macroeconomic and
financial stability, including above all to bring inflation down sustainably to the NBP
inflation target in the medium term. NBP may intervene in the foreign exchange market.