The Polish central bank has again lowered key interest rates on Wednesday, the third time in three months, in an effort to support faltering economic growth.
Poland is the only country in the European Union that avoided recession after the global financial crisis in 2008. Meanwhile, the effect of large state investments in infrastructure has waned, prompting economists to warn of the threat of recession.
To halt the trend of slowing growth, the monetary policy council of the central bank initiated a cycle of gradual interest rate cuts in November, with the rate now at 4.0 percent after today’s reduction of a quarter percentage point, the lowest since April 2011.
So far, economic prospects remain weak and the value of the Polish currency, the zloty, is still high against the euro, causing headaches for Polish exporters.
Poland’s economic growth sharply slowed in the third quarter of 2012 to 1.4 percent, after occasionally exceeding four percent in 2011.
Economists surveyed by Reuters predict that Poland’s GDP growth will further slow in the first quarter of this year to just one percent. More cautious analysts warn of the threat of stagnation or even a decline in activity.
The zloty strengthened against the euro by nearly 10 percent last year, placing it among the world’s currencies that recorded the largest value increase. Government officials now state that they prefer a weaker domestic currency to help the economy.
