NBP MPC Press Release - 2023-05-01
Central bank: nbp | Type: decision | Date: 2023-05-01

Warsaw, 10 May 2023
Information from the meeting of the Monetary Policy Council
held on 9-10 May 2023
The Council decided to keep the NBP interest rates unchanged:
▪ reference rate at 6.75%;
▪ lombard rate at 7.25%;
▪ deposit rate at 6.25%;
▪ rediscount rate at 6.80%;
▪ discount rate at 6.85%.
Despite an improvement in some of the indicators in recent months, the global economic
conditions remain weakened. In the euro area, the annual GDP growth in 2023 Q1 declined
further, while forecasts indicate that activity growth in 2023 will be low. At the same time,
uncertainty about global economic activity outlook persists, i.a. due to tensions in the
banking sector in the United States.
Inflation in the world economy is declining. However, in most economies it remains high,
driven by the lagged effects of the earlier supply shocks, including in the energy market,
as well as demand factors and increasing labour costs. Yet, the fall in prices of many
commodities together with the easing of global supply chain disruptions reduce price
pressure. This is reflected in systematically declining growth in producer prices. At the
same time, core inflation remains high.
In May 2023, the Federal Reserve of the U nited States and the European Central Bank
increased interest rates. In turn, the central banks in Central and Eastern Europe – after
earlier significant monetary policy tightening – are now keeping interest rates unchanged.
Amid the weakening of economic growth around the world, activity has also slowed
down in Poland. Retail sales , industrial output and construction and assembly output
recorded a fall in annual terms in March 2023. Despite the slowdown in activity, the labour
market situation remains good and unemployment is low. The number of working
persons remains high, although annual growth in employment in the enterprise sector
decelerates.
According to Statistics Poland flash estimate, CPI inflation in Poland declined to 14.7% y/y
in April 2023, aft er decreasing to 16.1% y/y in March 2023. The decrease in inflation in
annual terms was driven by a significant fall in annual growth in prices of food and non-
alcoholic beverages and – although to a lesser extent – a decline in annual growth in prices
of energy. At the same time, despite weakening demand growth, the level of inflation was
still affected by a significant increase in costs resulting from an earlier strong surge in
global commodity prices and disruptions in global value chains that was passed through
to consumer prices. However, commodity prices and growth of producer price index have
continued decreasing, which signals a gradual easing of external supply shocks. Together
with the weakening economic activity, it will support a decline in domes tic CPI inflation
in the coming quarters.
The Council assesses that the weakening of the external economic conditions, together
with a decline in commodity prices, will continue to curb global inflation, which will
contribute to lower price growth in Poland. The decline in domestic inflation will be
supported by a we akening of GDP growth, including consumption, amid a significant
decrease in credit growth. As a result, the Council assesses that the earlier strong monetary
policy tightening undertaken by NBP will lead to a decline in inflation in Poland towards
the NBP inflation target. At the same time, given the strength and persistence of the earlier
shocks, which remain beyond the impact of domestic monetary policy, the return of
inflation to the NBP inflation target will be gradual. The decrease in inflation would be
faster if supported by an appreciation of the zloty exchange rate, which, in the Council’s
assessment, 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, in particular to
limit fluctu ations of the zloty exchange rate that are inconsistent with the direction of
monetary policy.