Polish bond yields declined and the zloty weakened for a fourth day after the inflation rate fell below the central bank’s target for the first time in more than two years, stoking speculation of more interest-rate cuts.
Polish industrial output plunged the most in almost four years, boosting expectations for an interest-rate cut next month to avert the first recession in two decades for the European Union’s largest eastern economy.
Poland’s central bank kept its main interest rate at a record low for a 15th month as consumer-price growth remained at the lowest level in three years and policy makers await updated economic forecasts.
Poland’s central bank will cut borrowing costs for the first time since 2009 as the European Union’s biggest eastern economy slows amid the euro-area debt crisis, according to all 35 economists surveyed by Bloomberg.
Maja Goettig , chief economist at Bank BPH SA in Warsaw, comments on data showing Polish average gross wages rose an annual 5.9 percent in April. The median estimate of 21 economists surveyed by Bloomberg was for 4.7 percent increase.
Poland’s slowing economy is putting pressure on Prime Minister Donald Tusk to ease deficit cuts to avoid the fate of other European Union nations where austerity measures to tackle the debt crisis helped suffocate growth.