In April 2009, CPI inflation increased to 4.0% from 3.6% in March and was above the upper end of the inflation target band set by the Monetary Policy Council at 3.5%.

In April 2009 consumer prices accelerated compared to March. The largest upward contribution came from housing and household services and food. Prices of alcoholic beverages, hotels and restaurants, recreation, culture and health services also increased. Prices of communications services remained unchanged and prices of clothes, footwear and transport services were lower than in April 2008.

In April 2009 the producer price index (PPI) was at 5.1%, against 5.5% in March. In construction, the price index dropped to 0.8% from 1.3% in March.

A high increase in prices, like in the previous month, was recorded in the electricity, gas and water sector (20.0%). In mining, prices rose by 11.4%, compared to 10.1% in March and 8.9% in February; in manufacturing prices increased by 2.8%, slightly less than in March (up by 3.2%) and February (up by 3.4%).
In construction, growth in prices has been gradually slowing, despite the continued increase in wages. The reason is that prices of building materials are on the decrease.

The Monetary Policy Council keeps interest rates on hold, reduces the required reserve ratio

At a meeting on April 28 and 29, the Monetary Policy Council kept central bank interest rates on hold. From October 2008 to March 2009 the key rate was reduced by 225 basis points (from 6% to 3.75%). The Council also reduced the required reserve ratio, which should make it easier for banks to carry out lending activity.

Interest rates on April 30, 2009:
- reference rate: 3.75%,
- lombard rate: 5.25%,
- deposit rate: 2.25%,
- rediscount rate: 4.00%.

NBP (Monetary Policy Council): The exchange rates of the currencies of Central and Easter European countries, including the zloty, have become a bit less volatile recently but in most of the countries currency volatility has remained at a relatively high level. In April CPI inflation increased in Poland to 4.0% and stayed above the inflation target of 2.5% and above the upper end of the inflation target band of 3.5%. The main factor keeping the consumer price index at a heightened level is the high year-on-year growth in regulated prices, including energy prices, and prices of housing and household services. In April the increase in inflation was largely due to a rise in prices of food and prices of transport services, as a result of the previous sharp weakening of the zloty, and a rise in prices of goods subject to excise duty. All core inflation indicators also increased. The Council believes that in coming months inflation will probably go down but will still remain at a heightened level mainly as a result of relatively high year-on-year growth in food prices and regulated prices, especially energy prices. In the medium term, the global economic recession, contributing to an economic slowdown in Poland, will be easing inflationary pressure in Poland. A gradual deterioration of the labour market situation, and consequently slower wage growth and a less favourable financial condition of businesses, will also be pushing demand and inflationary pressure down. Stricter lending criteria imposed by banks will have the same effect. Inflation will be pushed up by the previous sharp weakening of the zloty. The Council assesses that the probability of inflation undershooting the target is higher in the medium terms than the probability of its staying above the target. In its decisions in coming months, the Council will be taking into account new data concerning prospects for economic growth and inflation, the situation on financial markets in Poland and in the world, data on the public finance sector and the exchange rate of the zloty. The Council also recognised that a fuller assessment of inflation prospects would be possible after the release of the June projection. (...) The Council decided to reduce the required reserve ratio by 0.5 pct. points from 3.5% to 3%. The decision applies to the reserves required since June 30, 2009. The Council believes that the reduction in the required reserve ratio should help banks increase their lending activity. The Council will still be analysing the impact of developments on the Polish interbank market on the transmission of monetary policy in Poland. The Council is sticking to its to-date position that Poland should enter ERM II and the euro zone as soon as possible (...). (“Minutes of the Monetary Policy Council Meeting on May 27, 2009”; www.nbp.pl)