IMF: Poland may need monetary easing

Poland may have to further ease its monetary policy in order to bring inflation back to the targeted level of 2.5 percent, the International Monetary Fund said in the concluding statement of a staff visit to the country. “Recent policy interest rate cuts are welcome,” the statement said, referring to a recent decision from the Monetary Policy Council to cut the reference interest rate by 50 basis point to 2 percent and the lombard rate by 100 bps to 3 percent. “Yet, downside risks to inflation persist amid slowing activity and disinflation in the euro area and unresolved geopolitical tensions surrounding Russia/Ukraine,” the IMF went on to say. “With the output gap still open and growth losing momentum, further monetary easing would be needed if inflation expectations continue to decline or if economic activity is projected to slow down further.” The IMF also said that it expects Poland's GDP to grow by some 3 percent in 2014. In a forecast issued in October, it said that 2014 growth would be at 3.2 percent.