UPDATE 2-Polish c.bank hikes less than expected as slowdown looms

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By Anna Koper

WARSAW, July 7 (Reuters) - Poland's central bank raised its main interest rate less than expected on Thursday as it forecast slowing growth and persistently high inflation this year and next.

It hiked its main interest rate by 50 basis points to 6.50%, a smaller move than the 75 basis points forecast by analysts in a Reuters poll.

Some economists think Poland could tip into technical recession this year, but with inflation running hot most say further tightening is inescapable.

"A further slowdown of economic growth is forecast for the coming quarters, while both the domestic and global economic outlook is subject to significant uncertainty," the bank said in a statement.

Piotr Bujak, chief economist at PKO BP, said the 50-basis-point hike was a "sensible decision".

"If the zloty is persistently under excessive pressure, with negative implications for the medium-term inflation outlook, there will still be a possibility to react," he said in a tweet. "Reacting to the threat of recession would be much more difficult."

The zloty weakened after the decision, but was nevertheless 0.14% firmer against the euro at 1446 GMT.

Inflation in Poland will be in the 13.2%-15.4% range in 2022 and 9.8-15.1% in 2023, according to the central bank's latest projections. It also sees gross domestic product growth (GDP) of 3.9%-5.5% in 2022 and 0.2%-2.3% in 2023.

"The new NBP forecasts are an important signal," Pekao analysts said. "This path of GDP is the same as a technical recession...This is consistent with the near end of the cycle."

The smaller-than-anticipated hike was in contrast with other central banks in the region, which have recently surprised with aggressive tightening.

Hungary's central bank raised its one-week deposit rate by a whopping 200 bps to 9.75% on Thursday in a bid to shore up the forint, after shocking markets by hiking its base rate by 185 basis points in June.

Romania's central bank delivered its biggest interest rate hike in more than a decade on Wednesday. (Reporting by Alan Charlish, Anna Koper, Pawel Florkiewicz; Editing by Toby Chopra and Mark Heinrich)