NBP MPC Press Release - 2016-10-05
Central bank: nbp | Type: decision | Date: 2016-10-05

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Warsaw, 5 October 2016 
Information from the meeting of the Monetary Policy 
Council held on 4-5 October 2016 
 
The Council decided to keep the NBP interest rates unchanged: 
 reference rate at 1.50%; 
 lombard rate at 2.50%; 
 deposit rate at 0.50%; 
 rediscount rate at 1.75%. 
 
Global economic growth remains moderate, while uncertainty about its outlook 
continues. In the euro area, e conomic growth is stable despite the negative impact of the 
weak economic conditions in the non -European emerging market economies. In the 
United States, incoming data point to some acceleration in GDP growth in 2016 Q3, 
which is accompanied by further improvement in the labour market. In China, economic 
growth is lower than in previous years, but recent data indicate s a stabilisation of 
economic conditions. Meanwhile, in Russia recession is gradually receding. 
Global commodity prices – despite a rise since the beginning of the year – are lower 
than in previous years. Low level of commodity prices, along with moderate global 
economic activity, has been the main factor behind low consumer price growth in many 
economies. 
The European Central Bank keeps its interest rates close to zero, including the 
deposit rate below ze ro, and continues financial asset purchases. The Federal Reserve 
– after a hike in December 2015 – keeps the interest rates unchanged, indicating their 
possible increase in the future. 
In Poland, stable economic growth continues. Incoming data indicate th at GDP 
growth in 2015 Q3 was probably close to that observed in the previous quarter. Steadily 
increasing consumer demand remains the main driver of economic growth . Consumer 
demand is supported by gradual improvement in the labour market , favourable 
household sentiment and the child benefit payments under the ”Family 500 plus” 
programme. Data on construction and assembly output indicate that declining 
investment is still containing economic activity. The decrease in investment is related to 
temporarily lower absorption of EU funds after expiration of the previous EU financial 
framework, as well as uncertainty in the enterprise sector. 
Annual growth in prices of consumer goods and services remains negative, yet 
deflation is gradually subsiding. Weakening deflationary trends are also visible in 
producer price developments. The increase in price growth results from dissipating 
effects of the earlier sharp fall in global commodity prices, and also the gradual 
acceleration in wage growth in Poland. Price growth is contained by low inflation abroad 
 
 
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and negative output gap in the domestic economy. At the same time, inflation 
expectations remain low. 
In the Council’s opinion, the scale of deflation will continue to decrease in the coming 
months. Higher price growth will be supported by stable GDP growth, amid accelerating 
wage growth and higher child benefits. In the coming quarters, inv estment growth 
should also rise, supported by good financial standing of enterprises , growing capacity 
utilisation of fi rms and a gradual increase in absorption of EU funds. The sources of 
uncertainty for expected economic activity and price developments are risks of a 
deterioration in global economy and a fall in commodity prices. 
The Council confirms its assessment that – given the available data and forecasts – 
the current level of interest rates is conducive to keeping the Polish economy on the 
sustainable growth path and maintaining macroeconomic balance.