NBP MPC Press Release - 2018-07-11
Central bank: nbp | Type: decision | Date: 2018-07-11

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Warsaw, 11 July 2018 
Information from the meeting of the Monetary Policy Council 
held on 10-11 July 2018 
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 conditions remain favourable. In the euro area , incoming data 
suggest continued favourable economic situation, despite a slightly slower GDP growth 
than in 2017. Similarly, in the United States, economic conditions remain sound, while 
incoming data suggest GDP growth in 2018 Q2 picked up. In China, in turn, economic 
activity has continued at stable rates for the past few quarters. 
Despite favourable global economic conditions, inflation abroad remains moderate on 
the back of persistently low domestic inflationary pressure across many countries and a 
decline in some agricultural commodity prices. At the same time, significantly higher oil 
prices than a year ago are increasing inflation rates. 
The European Central Bank keeps interest rates close to zero, including the deposit 
rate below zero. At the same time, the ECB continues to purchase financial assets, although 
it has announced a reduction i n the scale of purchases from October 2018 and the 
termination of the programme by the end of the year. The Federal Reserve raised interest 
rates in June and continues to gradually reduce its balance sheet. 
In Poland, economic growth remains relatively hig h. It is driven by rising 
consumption, fuelled by increasing employment and wages, disbursement of benefits and 
very strong consumer sentiment. This is probably accompanied by a further recovery in 
investment. 
Notwithstanding relatively high economic growth and wages rising faster than in the 
previous year, consumer price growth remains moderate. The slightly higher annual CPI 
rate than in the previous months reflects the growth in fuel prices. At the same time, 
inflation net of food and energy prices stays low. 
The Council became acquainted with the results of the July projection of inflation and 
GDP, prepared under the assumption of unchanged NBP interest rates. In line with the 
July projection based on the NECMOD model, there is a 50-percent probability that annual 
price growth will be in the range of 1.5 -2.1% in 2018 (against 1.6 -2.5% in the March 2018 
projection), 1.9-3.5% in 2019 (compared to 1.7-3.6%) and 1.7-3.9% in 2020 (compared to 1.9-
4.1%). At the same time, annual GDP growth – in line with this projection – will be with a 
50-percent probability in the range of 4.0-5.2% in 2018 (against 3.5-5.0% in the March 2018 
 
 
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projection), 2.8-4.7% in 2019 (compared to 2.8 -4.8%) and 2.4 –4.3% in 2020 (compared to 
2.6–4.6%). 
In the Council's assessment, current information and the results of the projection point 
to a favourable outlook for economic activity growth in Poland, despite the expected 
slowdown in GDP growth in the coming years. In line with the results of the projection, 
inflation will remain close to the target in the monetary policy transmission horizon. As a 
result, the Council judges that the current level of interest rates is conducive to keeping 
the Polish economy on a sustainable growth path and maintaining macroeconomic 
stability. 
The Council adopted Inflation Report – July 2018.