NBP MPC Press Release - 2024-05-01
Central bank: nbp | Type: decision | Date: 2024-05-01

Warsaw, 9 May 2024
Information from the meeting of the Monetary Policy Council
held on 8-9 May 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.
According to the preliminary flash estimates, in the euro area annual GDP growth in 2024
Q1 was low. At the same time, in the Unite d States annual GDP growth in 2024 Q1 was
still relatively high. 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 activity. In many economies core inflation also declines, although
it is still elevated.
In Poland incoming monthly data suggest an increase in annual GDP growth in 2024 Q1
compared to 2023 Q4. A rise in retail sales indicates higher consumption growth, whereas
a fall in industrial production as well as construction and assembly output mark s lower
investment growth. 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 March 2024 was lower than a year ago. At the same time , the annual
wage growth continuous to be high.
According to the Statistics Poland flash estimate, annual CPI inflation in April 2024 was
2.4% (against 2.0% in March 2024). The increase of inflation in annual terms was driven
mainly by a stronger growth in prices of food and non -alcoholic beverages, due to a
restoration of higher VAT , as well as by higher fuel prices . Considering the Statistics
Poland data, it can be estimated that inflation net of food and energy prices decreased
again in April 2024. In March 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 – despite some acceleration – economic activity
growth, it limits the growth in consumer prices . 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 2024 Q2 annual CPI growth will run
at the level consistent with the NBP inflation target. This will be accompanied by lower
than in the previous quarters inflation net of food and energy prices , although – due to
elevated growth in services prices – it will stay above the CPI inflation.
In subsequent quarters, inflation developments are, however, associated with substantial
uncertainty, related i.a. to the impact of fiscal and regulatory policies on price
developments, including on inflation expectations , as well as to 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 a marked 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.