NBP MPC Press Release - 2024-02-01
Central bank: nbp | Type: decision | Date: 2024-02-01

Warsaw, 7 February 2024
Information from the meeting of the Monetary Policy Council
held on 6-7 February 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 global economic conditions remain weakened, although they vary between the largest
economies. In 2023 Q4, the annual GDP growth in the euro area remained close to zero ,
and in Germany it was again negative . Meanwhile, in the United States , GDP growth
stayed relatively robust. Uncertainty about the activity outlook in the largest economies
persists.
In the environment of the Polish economy the process of disinflation continues, however
in many countries annual price growth remains elevated. Inflation is driven down by the
reduction of cost pressures reflected in falling producer prices, and by the weak growth in
economic activity . Under such conditions, in many economies core inflation declines,
although it is still elevated.
In Poland, according to Statistics Poland preliminary estimates, in 2023 , GDP grew by
0.2%, which implies that annual economic activity growth increased in 2023 Q4, yet it
remained relatively low. At the same time, 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 was lower in December 2023 than at the beginning of
2023.
Annual CPI inflation in December 2023 declined to 6.2% (from 6.6% in November 2023).
The decrease in inflation in annual terms was driven primarily by a fall in annual price
growth of food and non -alcoholic beverages , as well as core inflation . However, an
increase in annual price growth of energy had the opposite effect on annual inflation. In
December 2023, producer prices were again considerably lower than a year ago, which
confirms the fading of most external supply shocks and a reduction of cost pressures.
Together with the relatively low economic activity growth, it is conducive to a decline in
inflation. The Council judges that the decrease in inflation is supported by the appreciation
of the zloty exchange rate, which is consistent with the fun damentals 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 support s lower
domestic inflation. In 2024 Q1, annual CPI growth is likely to fall significantly, while the
decline in core inflation will be slower.
In subsequent quarters, however, inflation developments are associated with uncertainty,
related in particular to the impact of fiscal and regulatory policies on price developments,
as well as the pace of economic recovery in Poland. Should higher VAT on food products
be restored and energy prices raised, inflation might increase significantly in the second
half of 2024. At the same time, demand pressure in the economy will be stimulated by
elevated growth in nominal wages, 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 t he NBP
inflation target in the medium term. NBP may intervene in the foreign exchange market.