NBP MPC Press Release - 2014-01-08
Central bank: nbp | Type: decision | Date: 2014-01-08

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Warsaw, 8 January 2014 
 
Information from the meeting of the Monetary Policy 
Council held on 7-8 January 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; 
 rediscount rate at 2.75% on an annual basis. 
 
Growth in g lobal economic activity remains moderate. As business conditions in the 
United States have improved markedly, the Federal Reserve has decided to reduce the 
scale of quantitative easing starting from January 2014. At the same time, the euro area is 
slowly recovering, yet the pace of the recovery is limited and highly diversified across 
member countries. In turn, activity in the largest emerging economies – despite some 
improvement – continues to grow relatively slowly as for these countries. Moderate 
growth in global economic activity is conducive to inflation staying low in many 
countries. 
Data on domestic economic activity in November 2013 indicate a continuation of the 
gradual recovery in Poland. In particular, data on industrial output and retail sales ( in 
seasonally adjusted terms) suggest that activity in industry and retail sectors ha s 
remained on an upward trend . At the same time, decline in construction and assembly 
output has narrowed , which is indicative of some improvement in this sector. Business 
climate indicators also signal further growth in economic activity. 
Ongoing economic recovery translates into an improvement in labour market 
conditions only to a limited extent. Employment growth remains too weak to bring 
down the still elevated unemployment rate. High unemployment reduces wage and 
demand pressures in the economy, while wage growth in the corporate sector remains 
low. 
CPI inflation declined to 0.6% in November 2013 (from 0.8% in October), continuing 
well below the NBP inflation target of 2.5%. This was accompanied by a decrease in most 
core inflation indices. At the same time, producer prices in industry continued to fall, 
which indicates low cost pressure in the economy. Inflation expectations stayed low as 
well. 
Growth in lending to the private sector remains limited. In November 2013, the 
annual growth in corporate and household loans was still low. However, since mid-2013 
growth in consumer loans has been gradually gathering pace. 
 
 
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In the opinion of the Council, g radual economic recovery is l ikely to continue in the 
coming quarters, however, inflationary pressures will remain subdued. Therefore, the 
Council decided to keep NBP interest rates unchanged. The Council maintains its 
assessment that NBP interest rates should be kept unchanged at least until the end of the 
first half of 2014. 
In the opinion of the Council, lowering interest rates in the first half of 2013 and 
keeping them unchanged in subsequent quarters supports recovery of the domestic 
economy, gradual r eturn of inflation to the target and stabilisation in the financial 
markets.