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Citi economists projected that the National Bank of Poland (NBP) is likely to lower interest rates by 50 basis points at its upcoming meeting. This prediction aligns with recent remarks made by NBP Governor Adam Glapinski, who hinted at the possibility of rate cuts in the near future. Glapinski’s speech, published on April 18, conveyed a more optimistic outlook for inflation to return to the target than previously expected.
The governor cited a favorable slowdown in wage growth and a significant drop in oil prices as contributing factors. These comments are in line with the dovish tone observed during the NBP’s April press conference. Citi’s expectations are supported by the latest labor market data, which indicates a continued weakening of wage pressure. Consequently, the analysts at Citi anticipate a further deceleration of inflation in April.
The NBP’s potential move to reduce interest rates would come as a response to the evolving economic indicators. Glapinski’s speech and the subsequent analysis by Citi suggest that the central bank is prepared to adjust its monetary policy to address the changing inflationary landscape. The anticipation of a rate cut is based on the convergence of several economic factors, including labor market trends and commodity prices.
Should the NBP follow through with the rate cut as Citi predicts, it would mark a shift in the central bank’s strategy. The decision to lower rates would be aimed at steering inflation towards the NBP’s target, balancing economic growth with price stability.
The Monetary Policy Council’s meeting next week will reveal whether Citi’s forecast aligns with the central bank’s monetary policy actions.
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