Poland still sees steady rates at least until end-H1 2014

    Poland's central bank, which earlier today maintained its reference rate at 2.50 percent, repeated that "interest rates should be kept unchanged at least until the end of the first half of 2014."
    The National Bank of Poland (NBP), which has cut rates by 175 basis points this year, also said Poland's gradual economic recovery was likely to continue in coming quarters while inflationary pressures will remain subdued.
    Last month the NBP pushed back any rate rise until at least until the end of the first half of next year from September's statement that it would maintain rates at least until the end of this year. In July the central bank said its cycle of easing had ended after cutting rates by 225 points since November 2012.
    Poland's Gross Domestic Product expanded by a stronger-than-expected 1.9 percent annual rate in the third quarter, up from 0.8 percent in the second, as domestic demand rose, driven by rising consumption and a slight increase in investment while net exports had a lower positive contribution and inventories had a negative impact on GDP, the bank said.

    Last month the Organization for Economic co-Operation and Development (OECD) raised its forecast for Polish growth this year to 1.4 percent from a previous 0.9 percent  and its 2014 forecast to 2.7 percent from 2.2 percent. In 2012 Poland's GDP grew by 1.9 percent.
    In October there was a minor slowdown in the annual growth of industrial output and retail sales while construction and assembly continued to fall, albeit at a slower pace. Business climate indicators suggest a gradual recovery in coming quarters.
    "The gradual improvement in economic conditions is accompanied by fading negative trends in the labour market," the NBP said.
    While Poland's unemployment rate was steady at 13 percent in October from September and August, the number of employed people rose to 8.496 million in the third quarter, up from 8.490 in the second quarter.
    "Demand and cost pressures in the economy remain low," the central bank said, as headline inflation fell to 0.8 percent in October from 1.0 percent in September, well below the bank's 2.5 percent target.
   
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