NBP MPC Press Release - 2017-03-08
Central bank: nbp | Type: decision | Date: 2017-03-08

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Warsaw, 8 March 2017 
Information from the meeting of the Monetary Policy 
Council held on 7-8 March 2017 
 
The Council decided to keep the NBP interest rates unchanged: 
 reference rate at 1.50%; 
 lombard rate at 2.50%; 
 deposit rate at 0.50%; 
 rediscount rate at 1.75%. 
 
Global economic growth remains moderate, with signs of economic recovery 
strengthening in many economies. In the euro area, economic growth is stable, 
accompanied by favourable sentiment in industry. In the United States, economic 
conditions are supported by improving labour market, reflected both in rising 
employment and wages. In China, GDP growth picked up slightly in 201 6 Q4, while 
Russia has probably recovered from recession. 
Over past few months, inflation has risen considerably in many countries, mainly on 
the back of an increase in global commodity prices, which has recently come to a halt. At 
the same time, low demand pressure in many economies, including in the euro a rea, 
contains the rise in inflation and keeps core inflation at a moderate level. 
The European Central Bank keeps interest rates close to zero, including the deposit 
rate below zero. The ECB also continues its asset purchase programme. The Federal 
Reserve indicates a further rise in interest rates this year. 
In Poland, economic growth in 2016 Q4 was slightly higher than a quarter earlier. 
Economic growth was mainly driven by increasing consumer demand, supported by a 
rise in employment and wages, very good consumer sentiment and child benefit 
payments. At the same time, the fall in investment narrowed due to higher absorption of 
EU funds. Recent economic data, including industrial output, retail sales and labour 
market point to ongoing recovery. 
The annual growth in prices of consumer goods and services in Poland has picked up 
considerably over recent months, mainly due to higher global commodity prices, i.e. 
factors beyond the direct impact of domestic monetary policy. Core inflation remains 
close to zero, which points to still low demand pressure. Despite growing employment 
and wages, growth in unit labour costs remains moderate. 
In the Council’s opinion, following a considerable rise in the first months of the year, 
inflation will stabilise at a moderate level. The stabilisation of price growth in the coming 
quarters will result on the one hand from fading effects of the past increase in global 
commodity prices and on the other hand from only a gradual increase in domestic 
inflationary pressure stemming from improving domestic economic conditions. In 
 
 
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consequence, the risk of inflation running persistently above the target in the medium 
term is limited. 
Such an assessment is supported by the results of the March projection of inflation 
and GDP prep ared by the Economic Institute under the assumption of unchanged NBP 
interest rates. In line with the March projection based on the NECMOD model – taking 
into account data available until 20 February 2017 – there is a 50-percent probability that 
the annual price growth will be in the range of 1.6 – 2.5 % in 2017 (aga inst 0.5 – 2.0% in 
the November projection), 0.9 – 2.9% in 2018 (as compared to 0.3 – 2.6%) and 1.2 – 3.5% 
in 2019. The annual GDP growth – according to this projection – will be with a 50 -
percent probability in the range of 3.4 – 4.0% in 2017 (against 2.6 – 4.5 % in the November 
projection), 2.4 – 4.5% in 2018 (as compared to 2.2 – 4.4%) and 2.3 – 4.4% in 2019. 
The Council confirms its assessment that – given the available data and forecasts – 
the current level of interest rates is conducive to keeping the Polish economy on the 
sustainable growth path and maintaining macroeconomic balance. 
The Council adopted Inflation Report – March 2017.