NBP MPC Press Release - 2024-06-01
Central bank: nbp | Type: decision | Date: 2024-06-01

Warsaw, 5 June 2024
Information from the meeting of the Monetary Policy Council
held on 4-5 June 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 economic conditions in the environment of the Polish economy remain weakened,
despite some recent improvement . In 2024 Q1, the annual GDP growth in the euro area
was low, while in the United States it remained relatively high. Uncertainty about the
activity outlook in the largest economies persists.
Inflation in the major advanced economies – after a marked decline in 2023 – was still
running slightly above the central banks inflation targets in recent months . Inflation was
driven down by the reduction of cost pressures reflected in low producer price growth,
and by the weak activity growth in many economies. At the same ti me, core inflation
remains above headline inflation amid elevated growth in services prices.
In Poland , a gradual economic recovery continues. According to Statistics Poland
preliminary estimate, GDP grew by 2.0% y/y in 2024 Q1 (compared to 1.0% y/y in 202 3
Q4). The GDP growth was positively affected primarily by a rebound in consumption
demand. By contrast , annual investment growth declined markedly. In April 2024,
industrial production and retail sales were higher, while construction and assembly
output was lower than a year ago.
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 in
April 2024 was lower than a year ago. At the same time, the wage growth continues to be
high.
According to the Statistics Poland flash estimate, annual CPI inflation in May 2024 was
2.5% (against 2.4% in April 2024). In May 2024, annual energy price growth, including
fuels, increased. In turn, annual growth in prices of food and non -alcoholic beverages
declined slightly. Considering the Statistics Poland data, it can be estimated that inflation
net of food and energy prices decreased again in May 2024. In April 2024, the annual fall
in producer prices remained significant, which confirms the fading of most external
supply shocks and a reduction of cost pressures. Together with the relatively low – despite
some acceleration – economic activity growth, it limits the growth in consumer prices. The
Council judges that inflation is also curbed by the appreciation of the zloty exchange rate,
which is consistent with the fundamentals 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 lower inflation pressure abroad curbs domestic
inflation. As a result, in 2024 Q2 annual CPI growth will run at the level consistent with
the NBP inflation target. This will be accompanied by lower than in the previous quarters
inflation net of food and energy prices , although – due to elevated growth in services
prices – it will stay above the CPI inflation.
In subsequent quarters, inflation developments are, however, associated with substantial
uncertainty, related i.a. to the impact of fiscal and regulatory policies on price
developments, including on inflation expectations , as well as to the pace of economic
recovery in Poland and labour market conditions. Should energy prices be raised, inflation
will increase in the second half of 2024. Alongside that, over the medium term, demand
pressure in the economy will be stimulated by a marked wage growth, 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 a bove all to bring inflation down sustainably to the NBP
inflation target in the medium term. NBP may intervene in the foreign exchange market.