NBP MPC Press Release - 2016-06-08
Central bank: nbp | Type: decision | Date: 2016-06-08

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Warsaw, 8 June 2016 
Information from the meeting of the Monetary Policy 
Council held on 7-8 June 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, while uncertainty remains about its 
outlook. In the euro area, a gradual recovery continues, although weak economic 
conditions in emerg ing countries have a negative impact on the region’s economic 
outlook. In the United States, despite a slowdown in GDP growth in 2016 Q1, moderate 
economic growth is expected to continue. In turn, in China incoming data indicate a 
further deceleration of economic growth, while Russia and Brazil remain in recession. 
Prices of oil and many other commodities in the global markets – despite some 
increase in recent months – are still markedly lower than in previous years. The main 
factors behind very low consumer price growth in many economies are low commodity 
prices, combined with moderate global economic activity. In some economies – 
including the euro area – price growth is negative. 
The European Central Bank is keeping the interest rates at a very low level, including 
the deposit rate below zero, and continues financial asset purchases. At the same time, 
the Federal Reserve – after increasing the interest rates in December – is keeping the 
rates unchanged, while indicating a possible interest rate rise in the future. 
In Poland, GDP growth slowed down in 2016 Q1 . This was driven primarily by the 
fall in investment, which was partly related to the completion of projects co -financed 
with EU funds under the previous financial framework. At the same time, growth of 
consumer demand remained stable, supported by growing employment, improving 
consumer sentiment and growth in lending to households. Taking into account the 
continuing sound financial standing of enterprises and their high capacity utilization, the 
fall in investment – and thus also the weakening of economic growth – at the beginning 
of 2016 was most likely temporary. T he increase in consumer spending resulting from 
the launch of the "Family 500+" programme will also contribute to GDP growth in the 
coming quarters. Yet, the uncertainty about economic conditions abroad continues to be 
a risk factor for domestic economic activity. 
With negative output gap and moderate growth of average nominal wages, currently 
there is no inflationary pressure in the economy. Annual consumer price growth and 
producer price growth remain negative. External factors – particularly the earlier sharp 
 
 
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fall in global commodity prices and low price growth in the environment of the Polish 
economy – continue to be the main sources of deflation. This is accompanied by very low 
inflation expectations. The persisting deflation has not adversely affected decisions of 
economic agents so far. 
In the Council’s assessment, price growth will stay negative in the coming quarters 
due to the earlier substantial decline in global commodity prices. At the same time, GDP 
growth is expected to remain stable in the coming quarters, following a temporary 
deceleration early this year. Consumer demand will continue to be the main driver of 
economic growth, su pported by rising employment, forecasted acceleration of wage 
growth and an increase in social benefits. This notwithstanding, the downside risks to 
the global economic conditions and the volatility of commodity prices remain the 
sources of uncertainty for the domestic economy and price developments. 
The Council maintains its assessment tha t – 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.