By Martin M. Sobczyk

WARSAW-The National Bank of Poland left its main rate unchanged at 1.5% Friday, saying that level is conducive to balanced growth for the Polish economy despite persistent declines to consumer prices.

Polish consumer prices will continue to fall in annual terms in the coming quarters because of a significant decline to commodity prices in global markets, the bank said in a statement. In April, prices fell 1.1% in annual terms, according to an earlier flash estimate.

Falling prices aren't a concern at this time for the Polish central bank, its outgoing governor, Marek Belka, told a press conference Friday.

"It will go away," he said. "The situation in the labor market is improving very fast and sooner or later we will see faster growth of wages, which are factors that should reverse it."

Mr. Belka said Polish deflation hasn't led households to increase savings, which could hurt consumption, while the finances of companies are good.

Polish economic growth is driven by growing employment and wages, as well as an increase of welfare spending, the bank also said.

It expects first-quarter growth in Poland to be temporarily lower than in previous quarters. Poland's statistics office is set to release its flash reading of gross domestic product May 13 and economists expect it to have expanded 3.4% in annual terms.

The National Bank of Poland in April warned that the growth rate for the first quarter would be slightly lower than in the fourth quarter of 2015. At the time, the published reading of Polish fourth-quarter growth was 3.9% in annual terms. It has since been revised to 4.3%.

A majority of the Polish central bank's rate council in April didn't rule out the possibility of interest rate cuts in the case of an economic slowdown and deepening deflation in the country. But Mr. Belka said Friday that the Monetary Policy Council discussion Thursday and Friday showed no sign of readiness to change interest rates and the bank said a more robust growth pace should return after the first quarter.

Mr. Belka also said the Polish central bank was ready to intervene to stop any rapid moves in the zloty, which has weakened some 4% against the euro since the beginning of April to some PLN4.43 Friday. Much of that move was due to global factors, but speculation that Moody's Investors Service Inc. may cut Poland's rating or outlook at its review due May 13 has weighed on the Polish currency, Mr. Belka said

The Polish central bank chief said he believes that risk is already priced in and added that the bank has no exchange rate target or range for the zloty.

Moody's rates Poland at A2 with a stable outlook. Recent controversial moves by the Polish government to curb the powers of the nation's constitutional court have led to political strains at home and in relations with the European Union, leading to Standard & Poor's Corp. in January cutting its rating of Poland to BBB+ with a negative outlook from A-.

Write to Martin M. Sobczyk at martin.sobczyk@wsj.com

(END) Dow Jones Newswires

May 06, 2016 12:32 ET (16:32 GMT)