By Alan Charlish
WARSAW, Dec 5 (Reuters) – According to Reuters poll, Poland’s central bank will keep its main rate steady at 6.75% Wednesday. It did so after a lower-than expected inflation reading that supported its shift from a wait-and see stance.
The National Bank of Poland has been criticized at its two previous meetings. Governor Adam Glapinski said that tighter regulation could cause economic problems in an economy that is likely to experience a sharp slowdown by 2023.
Statistics office data showed a decline in inflation to 17.4% from 17.9% in November, and third-quarter GDP (GDP) data which pointed to a slowdown of private consumption.
Marta PetkaZagajewska (head of the macro research group at PKO Bank Poland) stated that “after this data, the central bank might feel more comfortable leaving interest rates unchanged than they were one month ago.”
“The story they are creating that we are currently experiencing a significant slowdown in demand and this will push down inflation looks quite reasonable.”
Inflation data and GDP are added to. S&P Global’s Polish Manufacturing Purchasing Managers’ Index (PMI)Poland’s data showed that while the country’s manufacturing sector was in deep recession, its input cost inflation was falling.
Reuters analysts polled believe that rates will remain stable until 2023, despite the fact that multiple MPC members have stated rates are at an acceptable level.
Glapinski and other rate-setters however have stated that the tightening cycle has been halted but not ended.
“Though the NBP did not expressly communicate an end to the tightening cycles, we believe that they have already ended,” stated Christian Wietoska, Head CEEMEA Research at Deutsche Bank.
“Keeping rates at hold at the last meeting… confirms that NBP’s bar is very high for tightening.”
All 20 analysts polled predicted stable rates Wednesday.
(Reporting by Alan Charlish, Editing by Toby Chopra
((alan.charlish@thomsonreuters.com;))
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