News

Is Poland's Two-Year Bout with Deflation Over?

Poland might not be a country that comes to mind when people think about a list of the world's major economies.

But Poland's economy is sizeable with a 2015 ranking of 25 by the International Monetary Fund. It ranked two notches higher in 2014 by both the World Bank and the United Nations.

After nearly two years of deflation, which Bloomberg (April 6) called the "longest bout … in 60 years," the nation's economy is seeing job growth.

Poland's central bank governor says he will keep rates the same.

Read this exerpt from a June 8 Reuters article:

Poland's central bank held interest rates steady June 8, with policymakers expressing hope that a booming labour market will at some point help to drag the largest economy in central and eastern Europe out of deflation.

The bank kept the key rate at a record low of 1.50 percent, as predicted by all analysts polled by Reuters, and said a slowdown in economic growth in the first-quarter was most likely temporary.

Marek Belka, whose term as central bank governor ends June 11, said the first month of the second quarter showed a "significant" rebound in economic activity and signaled a strong labour market could eventually start nudging prices higher...

Poland has been in deflation since July 2014. The central bank has attributed that mainly to declining oil prices, although the decline has also spread to core inflation...

The bank cut rates by half a percentage point last March to a record low, then announced its rate-cutting cycle was over. Rates have not changed since then.

You can read the entire article by following the link below: http://www.reuters.com/article/poland-cenbank-belka-idUSL8N19048T