NBP MPC Press Release - 2013-03-06
Central bank: nbp | Type: decision | Date: 2013-03-06

N a t i o n a l B a n k o f P o l a n d 
M o n e t a r y P o l i c y C o u n c i l 
 
 
 
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Warsaw, 6 March 2013 
 
INFORMATION FROM THE MEETING OF THE MONETARY 
POLICY COUNCIL 
held on 5-6 March 2013 
The Council decided to decrease the NBP interest rates by 0.50 percentage points: 
 reference rate to 3.25% on an annual basis; 
 lombard rate to 4.75% on an annual basis; 
 deposit rate to 1.75% on an annual basis; 
 rediscount rate to 3.50% on an annual basis. 
 
Incoming data show that the global economic activity remains low. In 2012 Q4, economic 
growth in the United States came to a halt, while the euro are a remained in recession. GDP 
declined in all major euro area economies, including Germany. At the same time, economic 
growth in some major emerging economies probably accelerated . In recent months, economic 
activity in several developed economies showed some signs of improvement. 
In Poland, the GDP data confirmed that in 2012 Q4 there was a marked economic slowdown. 
Weakening consumer demand was accompanied by slower decline in investment. Economic 
growth continued to be supported by a positive, albeit somehow lower than in the previous 
quarter, contribution of net exports. 
Incoming data point to still low economic growth in early 2013. Weak economic activity 
growth is accompanied by falling employment in the corporate sector and rising 
unemployment, which h olds back wage growth. At the same time, both household and 
corporate lending growth remains subdued. 
In January, CPI inflation declined more than expected. According to the preliminary data, CPI 
inflation was 1.7% y/y, running below the NBP inflation targ et of 2.5%. Also core inflation 
remained low, which confirms limited demand pressure in the economy. At the same time, 
household inflation expectations decreased further. 
The Council got acquainted with the inflation and GDP projection prepared by the Eco nomic 
Institute, which is one of the inputs to the Council’s decisions on the NBP interest rates. 
In line with the March projection based on the NECMOD model – assuming 
unchanged NBP interest rates – there is a 50 -percent probability of inflation running 
in the range of 1.3-1.9% in 201 3 (as compared to 1.8-3.1% in the November 
projection), within 0.8-2.4% in 201 4 (as against 0.7-2.4%) and between 0.7 -2.4% in 
2015. The annual GDP growth – in line with this projection – will be, with a 50 -
percent probability, contained within 0.6-2.0% in 201 3 (as compared to 0.5-2.5% in 
2 
 
the November projection), within 1.4-3.7% in 201 4 (as against 1. 1-3.5%) and within 
1.9-4.4% in 2015. 
 
In the opinion of the Council, incoming data confirm persistently low economic growth in 
Poland, no wage pressure and low inflationary pressure. Economic activity may gradually 
improve in t he coming quarters. However , GDP growth will probably remain moderate , 
which will continue to contain inflationary pressure. Such an assessment is supported b y the 
March projection of inflation and GDP. 
Considering the risk of inflation running below the NBP inflation target in the medium term, 
the Council decided to lower the NBP interest rates further. The March decision complements 
the monetary policy easing cycle commenced in November 2012. 
In the opinion of the Council, considerable monetary policy easing in recent months and at the 
March meeting will allow inflation to run close to target in the medium term and at the same 
time supports recovery of the Polish economy. 
The Council adopted the Inflation Report – March 2013.