NBP MPC Press Release - 2014-09-03
Central bank: nbp | Type: decision | Date: 2014-09-03

Warsaw, 3 September 2014 
 
Information from the meeting of the Monetary Policy 
Council held on 2-3 September 2014 
 
The Council decided to keep NBP interest rates unchanged: 
 reference rate at 2.50% on an annual basis; 
 lombard rate at 4.00% on an annual basis; 
 deposit rate at 1.00% on an annual basis; 
 bill rediscount rate at 2.75% on an annual basis. 
 
Growth in global economic activity remains moderate, although the economic 
situation varies across countries. Following a contraction in GDP in early 2014, economic 
growth in the United States accelerated significantly in 2014 Q2. Moreover, economic 
indicators suggest that the recovery will continue in the coming quarters. At the same 
time, economic growth in the euro area came to a halt in quarterly terms , as GDP in 
Germany and Italy decreased and France remained in stagnation . Economic activity 
indicators for the euro area may be pointing to some improvement in economic activity 
in Q3, though a deterioration in industrial sentiment has been recorded of late . In the 
largest emerging market economies, economic activity growth remains weak relative to 
their previous performance. 
Prices of many agricultural and energy commodities has decreased in recent months. 
Along with moderate global economic growth, this contributes to low inflation in many 
countries. In Poland’s immediate environment – including in the euro area and the 
countries in Central and Eastern Europe – inflation remains close to zero. 
Major central banks continue their expansionary monetary policy. While the Federal 
Reserve has been reducing the scale of quantitative easing, the European Central Bank 
intends to expand it. As a result, some central banks in the countries strongly linked with 
the euro area have recently reduced their interest rates. 
In Poland, incoming data point to a slowing momentum of economic growth. In 2014 
Q2, economic growth was slightly lower than in previous quarter . A decline in GDP 
growth resulted from a decrease in contribution of net exports below zero and a decline 
in investment growth. At the same time , a slight acceleration in consumption growth 
and a significant increase in inventories were conducive to a higher GDP growth rate. 
According to data for July, the annual growth in industrial production and retail sales 
remained low, while construction and assembly output growth plunged. Also, s ome 
economic activity indicators have recently declined, which may point to a further 
slowdown in economic activity. 
 
 
As economic growth decelerated in the second quarter , the number of the employed 
in the economy continued to rise . At the same time, wage growth eased. According to 
data for July, growth in employment continued in the enterprise sector, while the wage 
growth stabilized. 
Expansion in lending to the corporate sector and households in recent months has 
stabilized at a moderate level. 
In July, the annual CPI inflation dec lined and was negative ( -0.2%), remaining well 
below the NBP inflation target (2.5%). The decline in inflation was driven by decline of 
food prices and lower core inflation, which indicates a lack of demand pressure. Also, a 
decline in producer prices confirms no cost pressure s. It is accompanied by very low 
inflation expectations of businesses and households. 
In the opinion of the Council , uncertainty about the outlook for economic activity in 
Poland has recently increased, which translates into higher uncertainty about the 
prospects of inflation returning to the target. The Council decided to keep NBP interest 
rates unchanged. If the incoming data confirm weakening of economic activity and an 
increase in risk of inflation remaining below the target in the medium term , the Council 
will start an adjustment of monetary policy.