The National Bank of Poland (NBP) had slashed rates by a combined 100 bp in September and October.

The country’s consumer price index (CPI)-based growth was 6.5 per cent year on year (YoY) in October, dropping by 1.7 percentage points (pp) versus the previous month's annual reading, a flash estimate by Poland’s statistical office GUS showed last month. The inflation rate is now nearly 12 pp below February’s record high.

The rate-setting body had ‘adjusted’ interest rates in previous months and will now pause active policymaking in the light of "uncertainty regarding the shape of future fiscal and regulatory policies and their impact on inflation," it explained in a statement.

The country’s gross domestic product (GDP) slid by 1.4 per cent YoY in the second quarter (Q2) this year, easing further from a contraction of 0.6 per cent YoY in Q1, GUS data showed.

The central bank now assumes 11.3-11.5 per cent inflation this year against 11.1-12.7 per cent projected in July projection, before falling to 3.2-6.2 per cent next year (versus 3.7-6.8 per cent projected in July) and 2.2-5.3 per cent in 2025 (versus 2.1-5.1 per cent projected in July).

GDP growth is now forecast at minus 0.1-0.6 per cent this year (against minus 0.2-1.3 per cent in the July projection), 1.9-3.8 per cent in 2024 (versus 1.4-3.3 per cent expected in July) and 2.4-4.7 per cent in 2025 (versus 2.1-4.4 per cent projected in July).

The MPC feels the current level of the interest rates is conducive to meeting the NBP inflation target in the medium term.

Fibre2Fashion News Desk (DS)