Manufacturing PMI rose to 53.4pts in February (vs. 51.9pts in January) pointing at a further improvement in output and new orders (mainly export ones) as well as mounting supply constraints leading to inventories depletion, larger backlogs and higher costs. Registered unemployment rate inched up to 6.6% in February (vs. 6.5% in January, 0.1pp above our and consensus forecast), acc. to MinLab flash estimate. The number of unemployed increased by 10k, much less than in the same month during previous episodes of economic downturn.
As expected, the MPC has not introduced any changes to the monetary policy with reference rate stable at 0.10%. In line with our expectations, new NBP projections point to a higher CPI inflation path and stronger GDP growth than in previous projection. For 2021 the NBP sees inflation at 3.15% (vs. 2.6% in November), followed by 2.8% in 2022, and 3.2% in 2023. GDP is projected to expand by 3.9% in 2021 (vs. 3.1% seen in November) and 5.4% in 2022-2023. That said, while the NBP expects nominal GDP to return to the pre-crisis trend in 2023, it does not fear of inflationary pressure - a sign that despite awakened market expectations, NBP rates are to remain stable for the upcoming quarters.
NBP governor A.Glapiński said that the Polish MPC will closely follow monetary policy of the ECB and Fed when it comes to rate moves (esp. hikes) and declared QE to remain open-ended. For the time being the NBP is reluctant to participate in potential conversion of FX mortgage loans.
Details of NBP projection will be delivered on Monday together with the Inflation Report. From market perspective, drivers of 2022 fall of average inflation (2.8% vs. 3.15% in 2021) will be the key focus of attention.
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3.1% – harmonised unemployment rate in Poland, as of January 2021, the lowest in the European Union (for the first time ever).