Poland’s inflation rate continued to slow in February, the country’s statistics office reported on Thursday. The headline consumer price index (CPI) inflation rate fell to 1.3 percent in February in annualized terms, down from the 1.7 percent recorded in January.

The inflation rate is now well below the target of 2.5 percent set by the interest-rate setting Monetary Policy Council (RPP), and has now even fallen below the plus or minus 1-percentage-point band of tolerance that the RPP observes.

Source: National Bank of Poland

The figures indicated a further slowing of the Polish economy, and could leave room for further interest rate cuts. However, that may be unlikely, since Marek Belka, head of the RPP and president of the National Bank of Poland, said earlier this month that the council’s most recent 50 basis-point cut was a “full stop” at the end of its easing cycle.

At the time however, Mr Belka didn’t rule out further cuts, saying the council was now in “wait-and-see” mode, and that it would take into account further economic data. The RPP has cut interest rates by 1.50 percent since November.

Most economists say the RPP should keep cutting but Jan Winiecki, a member of the RPP, said that the lower inflation rate was due to one-offs, and that Poland’s pending recovery should push readings back towards 1.5-2 percent.

Andrew Kureth