Wednesday, October 2, 2013

Poland to keep rate steady until at least end 2013

    Poland's central bank, which earlier today held rates steady, repeated that expects to keep its reference rate "unchanged at least until the end of 2013, which will support a return of inflation to the target in the medium term."
    The National Bank of Poland (NBP) has cut rates by 175 basis points this year, most recently in July when it said the cycle of easier policy had ended. Last month it then said it would maintain the rate at least until the end of 2013 given low inflation pressures and moderate economic recovery.
   In a statement to a news conference, the NBP said the gradual economic recovery is likely to continue in coming quarters but inflationary pressure will remain subdued.
    Poland's inflation rate was unchanged at 1.1 percent in August from July - well below the NBP's target of 2.5 percent - while most core inflation measures declined.
   "Developments of inflation indices confirm still weak demand and cost pressures in the economy," the central bank said.
    August data on industrial and construction output, and retail sales confirms a weak economic recovery though better than last quarter and indicators suggest the gradual recovery will continue in coming quarters, the bank said.

    Poland's economy expanded by 0.4 percent in the second quarter from the first for annual growth of 0.8 percent, up from 0.5 percent in the first.
    Growth in lending to the private sector remains limited with annual growth in loans sluggish while there was a gradual recovery in consumer credit. Unemployment fell in August to 13 percent from 13.1 percent but the central bank said the persistently high rate is supporting slow wage growth. 


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