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Economists Predict Steady Rates, But History Warns of Caution as Poland’s Monetary Policy Council Meets

ECONOMYEconomists Predict Steady Rates, But History Warns of Caution as Poland's Monetary Policy Council Meets

The recent decisions of the Monetary Policy Council are quite predictable. It seems that today will also be predictable, but there have been surprises before in such situations. Meanwhile, there’s a better economic sentiment in Europe and an end to Hungary’s series of GDP decreases.

Better economic sentiment in Europe

Yesterday, we learned the PMI indices for services in Europe. The overall result for the Eurozone turned out to be slightly better than expected, reaching 50.2 pts. This is, however, that 0.2 pts not only more than expected, but also above the line separating positive responses from negative ones. This is the first result with mentioned prevalence since July last year. The UK, on the other hand, performed weaker than expected, although the result, despite not reaching predicted results, is higher and stands at 53.8 pts. After this data, investors again looked optimistically at the Old Continent and there was a further influx of funds strengthening the euro against the dollar.

Waiting for the MPC decision

Today, we will learn the Monetary Policy Council’s decision on interest rates. Looking at analysts’ predictions, it would be madness to expect anything other than the maintenance of interest rates. Rapidly falling inflation may suggest that there is room for such a decision, but the last press conference realistically ruled out such a possibility. President Adam Glapiński even believed that in his opinion, we will not change interest rates until the end of the calendar year. A sudden drop in inflation should not change this decision too quickly, as he forecasted a rapid drop in the pace of price growth in January data at the same conference. Therefore, one can assume that the forecast of postponing interest rate cuts in the future already included this information. As usual, the press conference scheduled for tomorrow should be more interesting than the meeting itself. This is typical for decisions by central banks and should not be criticized.

First quarter of growth in a year

Hungary broke its streak of bad luck yesterday. For the first time in a year, they managed to end the quarter without a drop in GDP. This does not mean that they had growth. Hungary’s GDP did not change in the fourth quarter of 2023. Analysts expected the same data, so it’s not surprising that there was no particular burst of enthusiasm in the currency market after nearly a year of recession.

In addition to the MPC’s decision on today’s macroeconomic calendar, it’s worth paying attention to:

14:15 – USA – ADP labor market report,
16:00 – Canada – decision on interest rates.

Maciej Przygórzewski – lead analyst at and

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