Cuts on the way?
Industrial output grew by just 2.6 percent year-on-year, according to the Central Statistical Office (GUS), down from 6.9 percent in June and only half the 5.0 percent rise expected by analysts.
Seasonally-adjusted figures showed better 4.7 percent growth, but the figures still sparked buying of Polish bonds, pushing yields down six basis points as expectations of a 25-basis-point cut this month firmed.
"These numbers are certainly well below the consensus and certainly seem to back hopes of a rate cut this month," said Anders Svensson, an analyst with Nordea in Copenhagen.
But speaking after the announcement Marian Noga, seen as a moderate on the bank's policy council, was the latest policymaker to cast doubt on the scope for easing this year, predicting no cut in August or September.
"Looking at the differences in rate levels [with European markets] and uncertainty over economic growth accompanied by inflation risks caused by oil prices, there is minimal scope to cut rates this year," he said.
Yet fellow council member Mirosław Pietrewicz, a consistent supporter of looser monetary conditions, said that a strong złoty and unfavourable growth leave room for easing.
"We have rather unfavorable growth data and złoty appreciation, which may extend after the elections. This may translate to problems with economic growth also in 2006, [which] shows there is scope to cut rates," he said. (Reuters)
Seasonally-adjusted figures showed better 4.7 percent growth, but the figures still sparked buying of Polish bonds, pushing yields down six basis points as expectations of a 25-basis-point cut this month firmed.
"These numbers are certainly well below the consensus and certainly seem to back hopes of a rate cut this month," said Anders Svensson, an analyst with Nordea in Copenhagen.
But speaking after the announcement Marian Noga, seen as a moderate on the bank's policy council, was the latest policymaker to cast doubt on the scope for easing this year, predicting no cut in August or September.
"Looking at the differences in rate levels [with European markets] and uncertainty over economic growth accompanied by inflation risks caused by oil prices, there is minimal scope to cut rates this year," he said.
Yet fellow council member Mirosław Pietrewicz, a consistent supporter of looser monetary conditions, said that a strong złoty and unfavourable growth leave room for easing.
"We have rather unfavorable growth data and złoty appreciation, which may extend after the elections. This may translate to problems with economic growth also in 2006, [which] shows there is scope to cut rates," he said. (Reuters)
