NBP MPC Press Release - 2023-11-01
Central bank: nbp | Type: decision | Date: 2023-11-01

Warsaw, 8 November 2023
Information from the meeting of the Monetary Policy Council
held on 7-8 November 2023
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. At the same time, uncertainty about
the activity outlook in the largest economies persists. In the euro area , the annual GDP
growth in 2023 Q3 slowed down and was close to zero, while in Germany it was negative.
Meanwhile, in the United States the annual GDP growth in 2023 Q3 accelerated and
exceeded a long-term average.
At the same time, inflation in many economies declines further, h owever, in most
countries annual price growth remains elevated. The earlier decrease of commodity prices
together with the easing of global supply chain disruptions reduce cost pressures, which
is reflected in falling producer prices in many economies. Core inflation in most economies
is still elevated, although it gradually declines.
Amid the weakened global economic conditions, also in Poland activity growth remains
low, although some data signal its gradual recovery . In September 2023 r etail sales and
industrial output decreased in annual terms, however, the scale of retail sale decline was
milder compared to the previous months. This was accompanied by a higher growth in
construction and assembly output. Despite the weakened activity growth, the labour
market situation remains good and unemployment is low. Although t he number of
working persons continues to be high, the annual growth in employment in the enterprise
sector halted.
According to Statistics Poland flash estimate, annual CPI inflation in October 2023
markedly declined again, falling to a level of 6.5% y/y (compared to 8.2% y/y in September
2023). The decrease in inflation in annual terms was driven mainly by a fall in annual price
growth of energy as well as food and non-alcoholic beverages. Considering the Statistics
Poland data, it can be estimated that core inflation also decreased again in October. In
September 2023 producer prices were again lower than a year ago, which confirms the
fading of most external supply shocks and a reduction of cost pressures . Together with
the low economic activity growth, it will support a further decline in consumer price
inflation in the coming quarters.
The Council became acquainted with the results of the November projection of inflation
and GDP based on the NECMOD model. In line with the projection , prepared under the
assumption of unchanged NBP interest rates and taking into account data available until
23 October 2023, there is a 50 -percent probability that the annual price growth will be in
the range of 1 1.3 – 11.5% in 2023 (against 1 1.1 – 12.7% in the July 2023 projection), 3.2 –
6.2% in 2024 (compared to 3.7 – 6.8%) and 2.2 – 5.3% in 2025 (compared to 2.1 – 5.1%). At
the same time, the annual GDP growth – according to this projection – will be with a 50-
percent probability in the range of -0.1 – 0.6% in 2023 (against -0.2 – 1.3% in the July 2023
projection), 1.9 – 3.8% in 2024 (compared to 1.4 – 3.3%) and 2.4 – 4.7% in 2025 (compared
to 2.1 – 4.4%). Inflation developments, both in the short and in the medium term, are
fraught with uncertainty related i.a. to future fiscal and regulatory policies.
The Council assesses that incoming data indicate low demand and cost pressures in the
Polish economy, which amidst weakened economic conditions and falling inflation
pressure abroad will support a gradual decline in domestic inflation. Considering the
adjustment in the NBP interest rates introduced in recent months, together with
uncertainty about a future course of fiscal and regulatory policies and their impact on
inflation, 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. The Council upheld the assessment that the decrease
in inflation would be faster if supported by an appreciation of the zloty exchange rate,
which would be consistent with the fundamentals of the Polish economy.
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 to the NBP inflation target
in the medium term. NBP may intervene in the foreign exchange market.