NBP MPC Press Release - 2023-04-01
Central bank: nbp | Type: decision | Date: 2023-04-01

Warsaw, 5 April 2023
Information from the meeting of the Monetary Policy Council
held on 4-5 April 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, forecasts indicate that GDP growth in 2023
will be low. At the same time, turmoil in the banking sector in the United States and
Europe has increased uncertainty about global economic activity in the coming quarters.
Inflation in the major advanced economies 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. In recent months,
prices of commodities have declined, which together with the easing of global supply
chain disruptions reduces price pressure. This is reflected in systematically declining
growth in producer prices. At the same time, core inflation remains high.
In March 2023, the Federal Reserve of the United 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 s lowed
down in Poland. Monthly data for February 2023 indicate a fall in retail sales and
industrial output in annual terms, accompanied by higher growth in construction and
assembly output. Despite the slowdown in activity, the labour market situation rema ins
good and unemployment is low. The number of working persons remains high, although
annual growth in employment in the enterprise sector declined.
According to Statistics Poland flash estimate, CPI inflation in Poland declined to 16.2% y/y
in March 2023 following a rise to 18.4% y/y in February. The decrease in inflation in annual
terms compared to February 202 3 was driven by a significant fall in growth of fuels and
energy carriers prices alongside stable annual growth in prices of food and non-alcoholic
beverages. At the same time, despite weakening demand growth, the level of inflation was
still affected by a significant increase in costs resultin g from an earlier strong surge in
global commodity prices and disruptions in global value chains that was passed through
to consumer prices. However, for several months commodity prices and growth of
producer price index have been decreasing, which signals a gradual easing of external
supply shocks. Together with the weakening economic activity, it will support a decline
in domestic 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 weakening 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 rat e, 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 fluctuations of the zloty exchange rate that are inconsistent with the direction of
monetary policy.