Lower interest rates would boost investment, Polish finance minister says

WARSAW, March 7 (Reuters) - Investments are what Poland's economy needs most now and lower interest rates would support them, Polish Finance Minister Andrzej Domanski said on Friday.

Poland is counting on investments bolstered by incoming pandemic recovery and resilience funds from the European Union to drive gross domestic product 3.9% higher this year.

"As finance minister, I do not judge the National Bank of Poland's policy, but it is basic macroeconomic knowledge that lower interest rates support economic growth, support investments, which is what the Polish economy needs most now," Domanski said in an interview with private broadcaster Polsat News.

Domanski was asked whether banks, which are reporting high profits, should ease margins on mortgage loans to benefit borrowers.

"Firstly, the high profits of banks, which are a fact, are a direct result of the very high interest rates in Poland," he said, adding that Poland's banking sector was highly competitive and that there are appropriate institutions to supervise it.

"I can only say that the main, definitely the most important factor that makes the banking sector results high this year is the high NBP interest rates," Domanski said.

The National Bank of Poland (NBP) has kept interest rates unchanged since October 2023 with the reference rate at 5.75%. Governor Adam Glapinski said in February there was no room for easing as inflation was forecast to remain elevated at the end of 2025 amid loose fiscal policy.

Earlier this week, central banker Ludwik Kotecki said the NBP could cut rates in the second half of 2025, a view echoed by the International Monetary Fund.