Cuts to create growth
It is thought that advisers may even move to an 'easing' policy bias after recent data raised doubts over the economy's strength.
Fourteen of 19 analysts surveyed in a Reuters poll said the bank would lower its main rate, currently at 5.5 percent, by a quarter point. Four saw a 50 basis-point cut, while only one expected the bank would keep rates steady.
Rates were cut by 100 points in March and April.
"Everybody has simply been surprised by how much the economy has slowed down. And the message we have from the council seems clearly that they intend to cut," said Lars Christensen, senior analyst with Danske Bank in Copenhagen.
Poland's economic growth fell to a two-year low of 2.1 percent year-on-year in the first quarter, hit by the base effect of a one-off buying boom before European Union entry last year and disappointingly low growth in investment and domestic demand.
Analysts have been surprised by the extent of the slowdown and fears that the economy may struggle to pick-up increased after May industrial output grew just 0.9 percent year-on-year.
Several central bank rate-setters have indicated that the slowdown will have an effect on the policy decision, with some openly saying a cut in borrowing costs is needed.
With inflation seen falling to the bottom end of the bank's 1.5-3.5 percent target range by December, analysts say rate-setters will also have room to take further steps to help growth.
"All signs are the economy is growing below its potential. We see no inflation pressures, demand is stable and investment rising only slowly, so there will be space for further cuts," said Rafał Benecki, an economist with ING Bank Ślaski, in Warsaw. (Reuters)
Fourteen of 19 analysts surveyed in a Reuters poll said the bank would lower its main rate, currently at 5.5 percent, by a quarter point. Four saw a 50 basis-point cut, while only one expected the bank would keep rates steady.
Rates were cut by 100 points in March and April.
"Everybody has simply been surprised by how much the economy has slowed down. And the message we have from the council seems clearly that they intend to cut," said Lars Christensen, senior analyst with Danske Bank in Copenhagen.
Poland's economic growth fell to a two-year low of 2.1 percent year-on-year in the first quarter, hit by the base effect of a one-off buying boom before European Union entry last year and disappointingly low growth in investment and domestic demand.
Analysts have been surprised by the extent of the slowdown and fears that the economy may struggle to pick-up increased after May industrial output grew just 0.9 percent year-on-year.
Several central bank rate-setters have indicated that the slowdown will have an effect on the policy decision, with some openly saying a cut in borrowing costs is needed.
With inflation seen falling to the bottom end of the bank's 1.5-3.5 percent target range by December, analysts say rate-setters will also have room to take further steps to help growth.
"All signs are the economy is growing below its potential. We see no inflation pressures, demand is stable and investment rising only slowly, so there will be space for further cuts," said Rafał Benecki, an economist with ING Bank Ślaski, in Warsaw. (Reuters)
