Headlines:
- The CNB will leave rates unchanged
- OECD praises Poland’s austerity measures
On Wednesday, regional currencies weakened the common currency. However, losses were relatively modest and reached about 0.5 percent. Meanwhile, the OECD said yesterday it revised the expected growth of the Polish economy to the upside to 3 percent in 2012, i.e. just shy of our estimate of 3.2 percent. Moreover, the OECD praised austerity measures undertaken by the government.
As regards today’s calendar, the eye-catcher is Czech National Bank’s (CNB) monetary policy meeting. We expect no change in interest rates, although inflation is seen significantly above the target. Faster than desirable pace of price growth is caused almost exclusively by rise in VAT and high commodity prices, i.e. the reasons beyond reach of the monetary policy. Consumption is steadily decreasing and lacklustre demand therefore poses no inflationary pressures. We still believe that the CNB might keep rates at the current levels throughout 2012.