NBP MPC Press Release - 2023-10-01
Central bank: nbp | Type: decision | Date: 2023-10-01

Warsaw, 4 October 2023
Information from the meeting of the Monetary Policy Council
held on 3-4 October 2023
The Council decided to cut the NBP reference rate by 0.25 percentage points, i.e. to
5.75%. At the same time, the Council set the remaining NBP interest rates at the
following levels:
▪ lombard rate at 6.25%;
▪ deposit rate at 5.25%;
▪ rediscount rate at 5.80%;
▪ discount rate at 5.85%.
The global economic conditions remain weakened. At the same time, uncertainty about
the activity outlook in the largest economies persists. In the euro area , incoming data
suggest that annual GDP growth slowed down further in 2023 Q3, while in Germany it
was negative. Meanwhile, in the United States the economic conditions remain relatively
favourable.
This is accompanied by a further decline in inflation in many economies, however, in most
countries annual price growth remains elevated. The earlier decrease of commodity prices
together with the easing of global supply chain disruptions reduce price pressures, which
is reflected in falling producer prices in many economies. At the same time, core inflation
in most economies is still elevated, although it gradually declines.
Amid the weakened global economic conditions, activity growth declined also in Poland.
Retail sales and industrial output decreased in annual terms in August 2023, however their
decrease was somewhat milder compared to a month ago . Despite the slowdown in
activity growth, the labour market situation remains good and unemployment is low.
Although the number of working persons continues to be high, in August 2023 the annual
growth in employment in the enterprise sector halted.
According to Statistics Poland flash estimate, annual CPI inflation in September 2023
markedly declined again, falling to a level of 8.2% y/y (compared to 10.1% y/y in August
2023). The decrease in inflation in annual terms was driven mainly by a fall in annual price
growth of energy as well as food and non -alcoholic beverages. Taking into account the
data by Statistics Poland, it can be estimated that core inflation also decreased again in
September. In August 2023 producer prices were again lower than a year before, which
confirms the fading of most external supply shocks and a reduction of cost pressures .
Together with the low economic activity growth, it will support a further decline in
consumer price inflation in the coming quarters. The significant fall in inflation is
accompanied by decreasing inflation expectations, which contributes to an increase in the
restrictiveness of monetary policy.
In the Council’s assessment, incoming data confirm weak demand and cost pressure in
the e conomy as well as reduc ed inflation pressure amongst the weakened external
economic conditions. Considering these circumstances – and taking into account the time
lags in the monetary policy transmission to the economy – the Council adjusted the NBP
interest rates, which is consistent with meeting the NBP inflation target in the medium
term. The Council upheld the assessment that the decrease in inflation would be faster if
supported by an appreciation of the zloty exchange rate, which 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.