Poland’s central financial institution has revealed its reluctance to chop rates of interest earlier than the top of this yr, as a variety of financial components threat pushing inflation up as soon as extra.
The Nationwide Financial institution of Poland saved its benchmark rate of interest regular at 5.75% at its January assembly on Thursday, consistent with analyst estimates. The reference price has stayed the identical since October 2023.
January’s determination was consistent with the central financial institution’s present hawkish stance, which was emphasised final month. Again within the December assembly, Adam Glapiński, the president of the Nationwide Financial institution of Poland, revealed that the central financial institution might not slash rates of interest till the top of this yr.
That is primarily due to the continued menace of inflation rising as soon as once more, in addition to the energy of the US greenback, supported by the US Federal Reserve’s personal hawkish place.
Expiring vitality worth caps in 2025 are additionally anticipated to push inflation up once more, additional discouraging the central financial institution from contemplating slicing rates of interest in the meanwhile.
The Euro/Polish zloty pair inched up 0.18% to 4.26 on Thursday afternoon, forward of the rate of interest determination.
Poland’s year-on-year inflation price got here as much as 4.7% in December 2024, the identical as November, in response to the Central Statistical Workplace of Poland (GUS). Nonetheless, this was marginally lower than preliminary estimates of 4.8%.
Non-alcoholic drinks and meals prices have been stagnant at 4.8% in December, with communication prices additionally staying the identical at 4.1%. Nonetheless, transport prices fell at a slower tempo in December, at -3.3%, from -4.1% in November.
Tobacco and alcoholic drinks’ costs additionally grew at a milder price in December, at 3.3%, down from 3.9% within the earlier month.
Tradition and recreation costs additionally dropped to five.5% in December, down from 6.1% in November.
Nonetheless, utilities and housing prices rose at a faster price to 10.1% in December, up from 9.9% within the earlier month. Well being prices additionally inched as much as 5.5% in December from 5.3% in November.
Polish economic system anticipated to develop in 2025
The Polish economic system is more likely to develop in 2025, in response to the European Fee. The gross home product (GDP) progress price is estimated to rise to three.6% this yr, from 3% in 2024, earlier than stabilising at 3.1% in 2026.
The European Fee stated on its web site: “In 2025, actual GDP is forecast to extend by 3.6%. Non-public consumption is ready to stay the important thing driver of progress alongside funding, together with EU-funded public funding and funding associated to reconstruction following the September 2024 floods.
“The unfavourable contribution from web exports is anticipated to slim on account of a rebound in exports as financial progress in key buying and selling companions picks up.”
Inflation can be anticipated to common about 4.7% in 2025, which might be a pointy rise from 2024’s 3.8%. In 2026, Polish inflation is more likely to fall again down to three%.
This yr, the Polish unemployment price is anticipated to common 2.8%, earlier than dipping barely to 2.7% in 2026. In distinction, in 2024, the unemployment price averaged 2.9%.
