Analysis shows that further reductions in interest rates does not translate into a boost for the acceleration of GDP growth. The Monetary Policy Council is now waiting for the acceleration of economic growth, and when it occurs, will be ready for the start of interest rate increases – said Adam Glapiński, president of the Polish National Bank and chairman of the Council.
– the growth is close to potential rates. Yes, the temptation of cutting interest is not at the moment. Personally, I hope that the first decision will be to raise the foot of the acceleration of GDP growth and inflation – said Glapiński during a press conference after the MPC meeting.
He stressed that everyone in the MPC would like to GDP growth accelerated, and with it appeared inflation. Then I would start tightening monetary policy. According to him, at the end of this year or early next deflation will turn into low inflation.
– I would like to GDP growth accelerated significantly at the end of this year and early next. We expect inflation at 1 percent, but if this increase would significantly accelerated, it would already be preparing to raise interest. The faster growth will accelerate, the better – said the head of the central bank.
It also pointed out that the decline in investment, which reduces GDP growth is mainly related to the delayed start of the use of the new financial perspective of the European Union. – It is mainly for investments at local government level. I hope that it will move strongly in the first or second quarter of next year – said Glapiński.
He added that all analyzes indicate that another interest rate cut would not affect currently on GDP growth.
the growth of the Polish GDP this year
the economic growth in the whole 2016 years will amount to 3.1-3.3 percent, but it’s still a good result, says Adam Glapiński.
– This is a good result, slightly lower than anticipated. 3.5 percent rather have not come out, because in the second half of the year would be approx. 3.8 per cent – said Glapiński conference after the MPC meeting.
– This indicator is good. If this growth rate is maintained over the years – the best 20 years – we would be very happy citizens and observers. This is a good pace – added the head of the central bank.
According to the July NBP projection, GDP growth will slow to 3.2 percent this, and then accelerate to 3.5 percent in 2017, to note again weaker result at 3.3 percent in 2018.
interest rates unchanged
the MPC kept interest rates unchanged, which means that the main reference rate is still 1 , 5 percent. This was in line with market expectations. Council statement stressed that the scale of deflation will gradually decrease, and the growth rate of prices in the coming quarters will be supported by a stable GDP growth.
“In the coming months, annual CPI will remain negative. The scale of deflation will be gradually decreased to which will contribute to fading effects of low commodity prices on world markets. the growth dynamics of prices in the coming quarters will be supported by a stable GDP growth, following in the conditions of growing wage growth and increased benefits education “- reads the release.
MPC maintained assessment that persistent deflation does not have as yet a negative impact on the decisions of economic actors.
“Rise should investments that will contribute to increasing the use of EU funds, a good financial situation of companies and the increasing use of their production capacity” – the release reads.
MPC stressed that the source of uncertainty for the expected development of the economic activity and the growth of prices remains a risk of a deterioration in global economic activity and lower commodity prices.
“the Council maintains its assessment that in the light of the available data and forecasts, the current level of interest rates is conducive to maintaining the Polish economy on the path of sustainable growth and to preserve macroeconomic stability “- summarized in the material.
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