NBP MPC Press Release - 2012-12-05
Central bank: nbp | Type: decision | Date: 2012-12-05

N a t i o n a l B a n k o f P o l a n d 
M o n e t a r y P o l i c y C o u n c i l 
 
 
 
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w w w . n b p . p l / r p p 
 
Warsaw, 5 December 2012 
 
INFORMATION FROM THE MEETING OF THE MONETARY 
POLICY COUNCIL 
held on 4-5 December 2012 
The Council decided to decrease the NBP interest rates by 0.25 percentage points: 
 reference rate to 4.25% on an annual basis; 
 lombard rate to 5.75% on an annual basis; 
 deposit rate to 2.75% on an annual basis; 
 rediscount rate to 4.50% on an annual basis. 
Incoming data show that global economic activity continues to be weak. Although economic 
growth in the United States accelerated in 2012 Q3, reces sion in the euro area persisted. At 
the same time, economic activity in the largest emerging economies was relatively low. Even 
though weak global economic activity supports inflation decline, the previously observed 
increase in commodity prices, which con tinue to be relatively high , has contributed to 
inflation remaining elevated in many countries. 
In the recent weeks, risk avers ion in the global financial markets has stabilised and 
commodity prices have increased slightly. 
A marked economic slowdown in Po land was confirmed by the data on GDP in Q 3. 
A decline in domestic demand deepened, which was driven by decreasing investment and 
decelerating consumption growth. At the same time, the contribution of change in inventories 
to GDP growth remained negative. Net exports continued to be the main factor behind GDP 
growth, which was related to a further decline in imports amidst still positive exports growth. 
Incoming monthly data, including the persistently slow growth in industrial production and 
retail sales, as well as a decline in the constructi on output, indicate that at the beginning of 
2012 Q4 activity remained low. 
Weaker business conditions are accompanied by a deteriorating situation in the labour market. 
In 2012 Q3, employment growth in the economy, i ncluding the corporate sector, slowed 
down. At the same time, the unemployment rate increased. Slower employment growth and 
higher unemployment rate contributed to wage growth deceleration. 
Simultaneously, in the recent months lending to households continued to weaken, including a 
further decline in t he volume of consumer loans. Growth in corporate loans slowed down as 
well. 
In October, CPI inflation decreased and amounted to 3.4%, while remaining above the NBP's 
inflation target of 2.5%. At the same time , most of the core inflation measures, as well as 
producer price growth continued to decline, which confirms weakening of demand and cost 
2 
 
pressures in the economy. Declining inflation was accompanied by lower inflation 
expectations of households. 
In the opinion of the Council, incoming data confirm a considerable economic slowdown in 
Poland, which results in limited wage and inflationary pressures. At the same time , the 
Council assesses that GDP growth will remain moderate in the coming years, which poses a 
risk of inflation declining below the NBP’s inflation target in the medium term. 
Therefore, the Council decided to lower the NBP interest rates. The decrease in the interest 
rates should support economic activity and thus reduces the risk of inflation falli ng below the 
target in the medium term. 
Should the incoming information confirm a protracted economic slowdown, and should the 
risk of increase in inflationary pressure remain limited, the Council will further ease monetary 
policy.