NBP MPC Press Release - 2015-07-08
Central bank: nbp | Type: decision | Date: 2015-07-08

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Warsaw, 8 July 2015 
 
Information from the meeting of the Monetary Policy 
Council held on 7-8 July 2015 
 
The Council decided to keep the NBP interest rates unchanged: 
 reference rate 1.50% on an annual basis; 
 lombard rate 2.50% on an annual basis; 
 deposit rate 0.50% on an annual basis; 
 rediscount rate 1.75% on an annual basis. 
 
Growth of global economic activity remains moderate . In the euro area , economic 
conditions improve gradually, although activity is still low . In the United States , recent 
data suggest that the slowdown at the beginning of the year was temporary and the 
economic outlook is favourable. In turn, economic growth in China remains low as for 
this country, while recession continues in Poland’s eastern trading partners, i.e. Russia 
and Ukraine. 
Despite the ongoing recovery in developed economies, the sentiment in the financial 
markets has recently deteriorated in the wake of growing fears of a Greek insolvency. 
This was conducive to a fall in prices of some financial assets as well as a weakening of 
exchange rates of Central and Eastern European currencies, including the zloty. 
Following a sharp and long-lasting fall , oil prices have risen slightly in recent 
months. This has weakened disinflationary forces in many countries, fuelling an increase 
in price growth in the euro area. However, price growth in the global economy remains 
very low, and in some European economies it is still negative. In these conditions, major 
central banks are keeping interest rates close to zero and the ECB is continuing its asset 
purchase programme. 
In Poland, GDP growth in 2015 Q2 most likely continued at a previous quarter level. 
Increase in consumption and investment, fuelled by an improving labour market 
situation, good financial condition of enterprises and a rise in lending , has probably 
remained the main driver of economic growth . At the same time, recent data do not 
indicate acceleration of economic growth in the coming quarters. 
Due to the moderate pace of growth in demand and the continuing negative output 
gap, there is no inflationary pressure in the economy. Moreover, low commodity prices 
and moderate nomina l wage growth are contributing to the continued lack of cost 
pressure. As a result, the annual growth of consumer prices remains negative, although 
the increase in the annual growth of fuel and food prices in the recent period has limited 
the scale of defl ation. The annual growth of producer prices is also negative, while 
inflation expectations remain very low. 
 
 
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The Council became acquainted with the projection of inflation and GDP prepared by 
the Economic Institute, which is one of the inputs to the Council ’s decisions on NBP 
interest rates. In line with the July projection based on the NECMOD model – prepared 
under the assumption of unchanged NBP interest rates and taking into account data 
available until 22 June 2015 (projection cut-off date) – there is a 50-percent probability 
that the annual price growth will be in the range of -1.1÷ -0.4% in 2015 (as compared to 
-1.0÷0.0% in the March 2015 projection), 0.7÷2.5% in 2016 (as compared to -0.1÷1.8%) and 
0.5÷2.6% in 2017 (as compared to 0.1÷2.2%). At the same time, the annual GDP growth 
rate – in line with this projection – will be with a 50 -percent probability in the range of 
3.0÷4.3% in 2015 (as compared to 2.7÷4.2% in the March 2015 projection ), 2 .3÷4.5% in 
2016 (as compared to 2.2÷4.4%) and 2.5÷4.7% in 2017 (as compared to 2.4÷4.6%). 
In the opinion of the Council, the annual price growth will remain negative in the 
coming months, mainly due to the earlier sharp fall in commodity prices . At the same 
time, the expected stable economic growth, amids t recovery in the euro area and good 
situation in the domestic labour market, reduce the risk of inflation remaining below the 
target in the medium term . Such an assessment is supported by NBP’s July projection . 
Therefore, the Council decided to keep NBP interest rates unchanged.