NBP MPC Press Release - 2016-03-11
Central bank: nbp | Type: decision | Date: 2016-03-11

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Warsaw, 11 March 2016 
Information from the meeting of the Monetary Policy 
Council held on 10-11 March 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 and the uncertainty about its outlook has 
recently increased. Economic recovery is under way in the euro area, yet driven mainly 
by consumer demand amid weak investment and export growth. In the United States, 
GDP growth slowed down in the second half of 2015 , following several years of 
recovery, and there is a risk of further economic weakening. In turn, economic growth 
continues to decelerate in China, while Russia and Brazil remain in recession. Concerns 
that activity in the emerging market economies might weaken further and the threat that 
this might translate into lower activity in the advanced economies currently pose the 
greatest risk for global economic conditions. 
Uncertainty about the global economy has affected financial market sentiment 
abroad, leading to a decline in the prices of many financial assets in recent months. 
Prices of oil and other commodities , i ncluding agricultural commodities, also remain 
low. In consequence, consumer price growth in many economies, including in the euro 
area, is close to zero, and inflation forecasts for the coming years are being revised down. 
The European Central Bank lowered interest rates in March and increased the scale of 
quantitative easing. In the United States, despite an increase in interest rate in December 
and indications of a further increase in the coming quarters, uncertainty about the future 
direction of monetary policy has risen. 
In Poland, stable economic growth continues and data for 2015 Q4 has even 
confirmed a slight acceleration in GDP growth. Domestic demand continues to be the 
key driver of GDP growth, supported by stable consumption growth and rising 
investment. The rise in demand is supported by favourable labour market conditions, 
positive consumer sentiment, sound financial standing of enterprises and their high 
capacity utilization, as well as lending growth. 
As the output gap remains negative and nominal wage growth is only moderate, 
there is no inflationary pressure in the economy. Annual consumer price growth and 
producer price growth remain negative. Yet, the persistence of deflation results mainly 
from the strong fall in global energy commodity prices in recent quarters. Inflation 
 
 
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expectations are still very low. The persist ing deflation has not yet adversely affected 
decisions of economic agents. 
The Council became acquainted with the projection of inflation and GDP prepared 
by the Economic In stitute, which is one of the inputs to the Council’s decisions on NBP 
interest rates. In line with the March projection based on the NECMOD model – 
prepared under the assumption of unchanged NBP interest rates and taking into account 
data available until 23 February 2016 (projection cut -off date) – there is a 50 -percent 
probability that the annual price growth will be in the range of -0.9 – 0.2% in 2016 
(against 0.4 – 1.8% in the November 2015 projection), 0.2 – 2.3% in 2017 (compared to 0.4 
– 2.5%) and 0.4 – 2.8% in 2018. At the same time, the annual GDP growth – in line with 
this projection – will be with a 50 -percent probability in the range of 3.0 – 4.5% in 2016 
(against 2.3 – 4.3% in the November 2015 projection), 2.6 – 4.8% in 2017 (compared to 2.4 
– 4.6%) and 2.1 – 4.4% in 2018. 
In the Council’s assessment, price growth will remain negative in the coming 
quarters due to the earlier strong fall in global commodity prices. At the same time, a 
gradual increase in core inflation is expected . It will be supported by stable economic 
growth, including an anticipated rise in consumer demand growth driven by rising 
employment, forecasted acceleration of wage growth and an increase in social benefits. 
This notwithstanding, the downside risks to the global economic conditions are a source 
of uncertainty for the domestic economy. 
The Council continues to assess 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. 
The Council adopted Inflation Report – March 2016.