(Bloomberg) -- Poland extended its pause on interest rates to more than a year as policymakers look past a recent decline in inflation and weakening economic growth for a clear outlook to emerge.

The Monetary Policy Council kept its benchmark at 5.75% on Wednesday, in line with the forecasts of all 31 economists surveyed by Bloomberg. While headline inflation decelerated for the first time in eight months in November, declining to 4.6% year-on-year, the central bank expects price growth to peak at between 5.3% and 6.6% in the first quarter of 2025.

Unlike peers across much of eastern Europe, Poland’s central bank has kept interest rates unchanged throughout 2024 as the government reduced or fully exited from costly price caps on food and energy costs. This boosted the inflation rate above the policymakers’ target of 2.5%.

A number of MPC members, including Governor Adam Glapinski, expect to start discussions about reducing interest rates in March if central bank forecasts show a steady decline in inflation. But Deputy Governor Marta Kightley told Bloomberg last week there is no room for significant cuts.

On the other hand, recent data signal that Poland’s $800 billion economy is struggling and in need of lower borrowing costs. Seasonally-adjusted gross domestic product shrank 0.1% in the third quarter, compared with the previous three months, while private consumption has faltered.

“Incoming data has pointed to a slightly less pro-inflationary macroeconomic environment,” said Grzegorz Maliszewski, chief economist at Bank Millennium SA. “We have assumed that the MPC will resume rate cuts in the second quarter, but the recent data, planned energy price caps for 2025 and ECB cuts all increase the risk of a reduction in March.”

Maliszewski expects no major changes in the central bank’s post-meeting statement due out at 4 p.m. in Warsaw or at Glapinski’s news conference, which starts at 3 p.m. on Thursday.

--With assistance from Barbara Sladkowska.