Poland’s Central Bank likely to keep interest rate on hold till Q1 2018
Central banks treaded carefully amidst uncertain economic outlook and as the details of Britain’s planned exit from the European Union unfolds. National Bank of Poland meets Wednesday, 9th November and is expected to keep rates steady at 1.5 percent.
The bank cut rates by half a percentage point last March and announced the end of its rate-cutting cycle. Rates have not changed since then. A Reuters poll showed last week that Poland’s central bank is expected to keep benchmark interest rates at a record low of 1.50 percent until the first quarter of 2018.
Economists and the government have been downgrading their forecasts for Poland’s economic growth this year due to a slump in public and private investment. Q2 GDP data highlighted concerns about weakening in growth dynamics. Despite a modest rebound in Q2, H1 as a whole recorded slower than 3 percent annualised growth.
Inflation in Poland fell -0.2 percent y/y in October, the shallowest deflation since July 2014. NBP forecasts inflation to remain below-target for the entire monetary policy horizon up to 2017, but still forecasts core inflation to establish an uptrend over the coming quarters through H1 2017.