NBP responded to the COVID-19 pandemic – “quickly and appropriately” – the International Monetary Fund has ended its review of the Polish economy

Date of publication:
  • The asset purchase programme (APP) conducted by NBP was communicated clearly and met its stated goals.
  • On 3 February 2021 the Executive Board of the International Monetary Fund (IMF) adopted the annual Staff Report for the 2020 Article IV Consultation.
  • In the opinion of the IMF, Narodowy Bank Polski’s quick and appropriate monetary easing helped to mitigate the negative impact of the pandemic on the economy and the banking sector.
  • NBP’s accommodative monetary policy stance remains appropriate, and NBP should maintain its current monetary policy stance until the economic recovery is well established.
  • The IMF also positively assessed the condition of the Polish economy and emphasised that it is well positioned for a recovery.

In the opinion of the IMF, the resilience of the corporate sector and the labour market, aided by the strong support of the anti-crisis measures of the government and NBP, should foster a strong rebound of the Polish economy. The IMF estimates that in 2020 Poland experienced one of the least severe recessions in the European Union, with a drop in Gross Domestic Product (GDP) of 3.4% in 2020. The IMF expects that a rebound will begin in 2021 Q2 along with increased access to a COVID-19 vaccine. The slower growth rate in 2021 Q1 will limit GDP growth in 2021 to 2.7%. A further acceleration of economic growth is projected to take place in 2022.

According to the IMF, Narodowy Bank Polski quickly and appropriately eased monetary policies, effectively complementing fiscal policies, which mitigated the negative impact of the pandemic on the economy and the banking sector. The asset purchase programme (APP) conducted by NBP was communicated clearly and met its stated goals of providing liquidity to government bond markets and strengthening monetary policy transmission. The transparency of the APP has been high, and full information on NBP’s purchases and securities holdings is made public.

The IMF expects that core inflation, which at the end of 2020 was running above the inflation target and stood at 3.6%, will decline towards the end of 2021 to 1.9% (annual average 2.5%). According to the IMF, the elevated inflation at the end of 2020 was partly driven by one-off factors, such as higher prices of high-contact services and bank fees.

NBP’s accommodative monetary policy stance remains appropriate and NBP should maintain its current monetary policy stance until the economic recovery is well established, taking into consideration the significant uncertainty of the expected economic growth and level of inflation. Continued clear policy communication will support the effectiveness of the asset purchase programme.