Interest rates could fall as Poland's economy slows

“There is a change of atmosphere and attitude at the Monetary Policy Council (MPC) to how it was a few months ago. Today we are talking about the prospect of more cuts, and not about any urgent need to increase [interest rates],” Belka, a former prime minister of Poland, told Radio PIN on Tuesday.

The MPC raised borrowing rates by 0.25 percent in May on fears of increasing inflationary pressures.

But the Polish economy, one of the few in Europe to show growth rates this year, looks to be finally succumbing to a slowdown in the eurozone area, which has hit Poland's exports.

“Today is not a good time. Our main export markets are stagnating, exporters are bombarded by bad news,” Belka said.

The government in Warsaw has signalled it will be announcing a stimulus package in September after prioritising lowering debt levels since being re-elected last autumn.

Marek Belka also said, however, that at the next meeting of the MPC in the first week of September, there will probably be no cut in the borrowing rate for the time being. (pg)