The Monetary Policy Council for the second month in a row refrained from raising interest rates. Earlier, it had increased them three times, each time by 25 base points. Today, the main interest rate in Poland amounts to 5.75 percent. MPC members fear about the future of the economy.
“The council said that the GDP growth is high but it may slow down in upcoming quarters. It also stresses that increased inflation is due to elements which are beyond the influence of the national monetary policy”, Adam Antoniak Bank BPH economist commented.
Seven out of 10 economists polled by “PB”, believe that another interest rate increase will be announced as early as in June. And this may be not the last word from the MPC this year.
“Interest rates will grow by 75 base points this year to 6.5 percent”, Marcin Mroz, Fortis Bank chief economist forecast.
Economists differ in their opinions on when the MPC will start cutting interest rates. Half of them believe it will occur next year.
“Inflation fears will be weaker. Cuts will start in the second quarter of 2009. Rates will fall to 5 percent in December 2009”, Wojciech Matusiak, BGZ economist said.
Others believe rates will remain unchanged through 2009.
“Weakening economy is an argument to loosen monetary policy. On the other
hand, inflation will be slightly higher. These factors will balance and there
will be no space to change interest rates, neither up nor down”, Maciej Reluga,
BZ WBK chief economist believed.