Why did the MPC reduce interest rates?
When the expectations of interest rates in May appeared last month, Ireneusz Dąbrowski said that he would prefer the reduction only in July. A member of the MPC said in an interview with Grzegorz Siemionczyk of Money.pl that during this month the situation changed a bit, and the data that has been flowing since then was better than expected. “I already said in November that I would prefer to wait a little with foot reductions, but immediately start the cycle. It did not happen because The decrease in inflation turned out to be deeper From expectations. We reacted to this by adjusting the feet, “says Dąbrowski.
What data has accelerated the reduction of interest rates?
- Inhibiting salary growth – “It seems that [wzrost] heads in the direction of 6 percent annually, i.e. a safe, consistent level with the NBP inflation target [2,5 proc. +/- 1 proc.]” – said Dąbrowski.
- Full Data on inflation In the first four months – the inflation path is almost 1 percentage below the expectations of the NBP's March projection, which is a significant difference.
- Strong decrease in prices of energy raw materials – The March projection assumed that inflation would rise in the third quarter because the prices of energy carriers would jump. Today it is not so certain, and if this happens, the growth will be smaller than the analysts previously assumed.
Why did the reduction of the foot amounted to as many as 50 base points?
The interviewer Grzegorz Siemionczyk pointed out that usually interest rate changes oscillate around 25 base points. Dąbrowski explained that this was not a typical reduction in the entire cycle, and “Adjusting interest rates related to the fact that inflation It is clearly lower than the projection indicated. ”
What about interest rates in June?
Considering these data from the economy that we know today, in my opinion in June there is no space for another reduction in interest rates. There would have to be some new, surprising data, showing, for example, sharp braking of wage growth
– said Dąbrowski.
When is another interest rate reduction?
Ireneusz Dąbrowski believes that “a discussion about any subsequent reductions will start at the earliest in July, when the MPC is familiar with the new inflation projection. “As he adds, the reduction cycle will start when the MPC is sure that” that The wage increase is convergent with an inflation goal that Inflation expectations have normalized'
Favorable perspectives for the Polish economy
Perspectives for the Polish economy Despite global uncertainty, they are beneficial. In the opinion of PKO Bank Polski, the domestic economy is resistant to negative external factors. Bank's main economist Piotr Bujak said that the first months of this year were marked by a great increase in uncertainty. “Consumer demand remained solid at the beginning of this year, in the background good situation on the labor market ” – he explained. He added that some could be seen signs of revival of demand investment. In the bank's opinion, a reduction in interest rates in May with 50 base points means releasing the potential of the growth of the credit market in the following quarters.
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Sources: Money.pl, Ar