Minutes: Central bankers differed on view of economic situation

At their October sitting, members of Poland’s Monetary Policy Council (RPP) expressed varied views about the economic growth recorded in Poland is recent months and its expected outcome, according to the minutes of the meeting, published on Thursday. “Some Council members emphasized that economic activity had proved weaker than forecast in the July projection of [the National Bank of Poland]. At the same time, those members pointed to the flagging industrial output growth, stagnant construction and assembly output as well as the PMI index running below 50 points,” the statement read. “They also observed that economic activity growth in Poland had been dragged down by a strong fall in exports to the former Soviet Union countries and a marked weakening in exports growth to the euro area.” At the same time, another group in the RPP “argued that economic growth had decelerated only slightly and its pace was currently close to potential output growth.” “They pointed to the gradually improving situation in the labor market, including a decline in the unemployment rate and further steady wage growth, which supported retail sales growth. They also argued that relatively robust economic activity was accompanied with sound financial situation of enterprises,” the minutes also said. In October, the RPP cut the NBP’s reference rate by 50 basis points to 2.00 percent and the lombard rate by 100 bps to 3.00 percent. The deposit rate was left at 1.00 percent and the rediscount rate at 2.25 percent.