WARSAW: Poland's central bank announced Wednesday it had cut its key interest rate by a quarter-point to 4.25 percent.
The decision was in line with analysts' forecasts, after inflation dipped and the third quarter saw a significant slowdown in growth.
The Polish National Bank's independent Monetary Policy Council (MPC) cut the benchmark seven-day intervention rate by 25 basis points to 4.25 percent.
Analysts said Wednesday they expected further rate cuts in the months to come.
"We think the economy is set to slow further over the coming months which, ultimately, could trigger larger rate cuts by early next year," Capital Economics analysts said in a statement.
"Either way, we think interest rates will fall further than most seem to expect," they said.
Poland's economy slowed faster than expected in the third quarter, owing primarily to doldrums in neighbouring Germany with some analysts predicting a deeper slump in 2013, but no recession.
The third quarter saw adjusted growth on a 12-month basis slide to 1.9 percent from 2.5 percent in the second quarter, official data showed on Friday.
On a quarter-to-quarter comparison growth was unchanged at 0.4 percent in this market of 38.2 million consumers comprising Central Europe's largest economy.
Inflation fell to 3.4 percent in the 12 months to the end of October from 3.8 percent in September and August and 4.0 percent in July.
Poland is the only member of the 27-state European Union to have avoided recession since the global economic crisis struck in 2008.
Having joined the European Union in 2004, Poland has also seen its economy expand each year since it shed communism more than two decades ago.
The economy grew by 4.3 percent in 2011. This year's budget forecasts a slowdown to 2.5 percent growth, while the 2013 budget foresees 2.2 percent growth in output.
In October, Centrist Prime Minister Donald Tusk unveiled a 42 billion euros ($55 billion) plan for short-term stimulus to sustain growth and jobs. Unemployment stands at 12.5 percent.
Heavy investment in public transport infrastructure, primarily motorways and railway, was a significant growth driver ahead of the Euro 2012 football championships Poland co-hosted with non-EU neighbour Ukraine this June.
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