NBP MPC Press Release - 2012-07-04
Central bank: nbp | Type: decision | Date: 2012-07-04

National Bank of Poland
Monetary Policy Council 
 
 
00-919 Warszawa, ul. Świ ętokrzyska 11/21, phone (22) 653 28 88, fax (22) 653 13 28 
 
 
Warsaw, 4 July 2012 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 3-4 July 2012 
The Council decided to keep the NBP interest rates unchanged: 
 reference rate at 4.75% on an annual basis; 
 lombard rate at 6.25% on an annual basis; 
 deposit rate at 3.25% on an annual basis; 
 rediscount rate at 5.00% on an annual basis. 
Incoming data suggest weakening activity in the global economy. Stagnation in the euro area is 
accompanied by moderate growth in the United Stat es. At the same time, economic activity in the 
major emerging economies is deteriorating. Weak ening growth in the gl obal economy contributes 
to falling commodity prices. Dece leration in growth of energy pric es, and – in some countries – 
also food prices, is conducive to the decline in global inflation. 
Despite persisting uncertainty about the situation in the euro area, the sentiment in the 
international financial markets has stabilized in the recent weeks. This contributed to appreciation 
of most emerging economies’ currencies, including the zloty. 
In Poland, data on output and retail sales in May were better than expected. However, the total 
growth in output and sales in the first months of Q2 decelerated as compared to the previous 
quarter, which, amidst leading business indicator s persisting at relatively low levels, confirms 
further gradual slowdown in economic growth. In May employment growth in the corporate sector 
remained weak and the unemployment rate persis ted at elevated level. Wage growth in the 
corporate sector was still moderate. 
At the same time, growth in lending to enterprises weakened somewhat. Lending to households 
decelerated further, driven by a decline in consumer loans and lower growth of housing loans. 
In May, CPI inflation fell to 3.6%, remaining a bove the NBP’s inflation target (2.5%). Decline 
was also noted in core inflation and inflation expectations of households and corporates. 
The Council got acquainted with the inflation and GDP projection prepared by the Economic 
Institute of the NBP, being one of the inputs to the Council’s decisions on the NBP interest rates. 
The July inflation and GDP projection implies that GDP growth in 2013 will fall below its 2012 
level and then accelerate in 2014. At the same tim e, inflation, after a temporary rise in 2012 Q3, 
will be gradually declining and will be close to the inflation target in 2013. 
In line with the July projection based on the NECMOD model – prepared under the assumption of 
constant NBP interest rates – there is a 50-percen t probability of inflation falling within the range 
of 3.6-4.2% in 2012 (as compared to 3.6-4.5% in the March projectio n), 2.0-3.4% in 2013 (as 
compared to 2.2-3.6%) and 1.0-2.7% in 2014 (as comp ared to 1.2-3.0%). In turn, in line with this 
 
2 
 
projection there is a 50-percent pr obability of the annual GDP growth falling within the range of 
2.3-3.6% in 2012 (as compared to 2.2-3.8% in the March projection), 1.0-3.2% in 2013 (as 
compared to 1.1-3.5%) and 1.7-4.2% in 2014 (as compared to 1.9-4.4%). 
In the opinion of the Council, in the coming months inflation is like ly to increase temporarily and 
remain above the upper limit of deviations from the inflation target. However, in the medium-
term, economic slowdown amidst fiscal tighteni ng and interest rates in creases implemented in 
2011 and 2012 will be conducive to in flation returning to the target. This assessment is also 
supported by the July projection of inflation and GDP. 
Therefore, the Council decided to keep the NBP interest rates unchanged. 
The Council does not rule out th e possibility of further moneta ry policy adjustment, should the 
outlook for inflation returning to the target deteriorate. 
The Council adopted the Inflation Report – July 2012.