Poland: The NBP is likely to cut rates further – Standard Chartered

The GDP growth downtrend that began in mid-2018 looks likely to accelerate in the coming quarters as the coronavirus affects the Polish economy via both domestic and external channels, economists at Standard Chartered Bank report. EUR/PLN trades at 4.575.

Key quotes

“We now forecast growth of -1.7% in 2020 (3.4% previously) and 2.4% in 2021 (from 2.8%); we keep our 2022 forecast unchanged at 2.7%.” 

“The NBP is likely to cut rates further. We lower our end-year policy rate forecast to 0.50% (from 1.50% previously), and see it rising back gradually to just 0.75% by end2021 (1.75% previously).”

“We think the NBP will cut by at least another 50bps in Q2. We think the NBP is unlikely to cut rates to 0.0% and will focus instead on other measures to support the economy.”