Economic Analysis

In today's Eyeopener

- Today detailed CPI data for December and NBP governor’s speech 
- MPC left interest rates unchanged, in line with expectations
- Spending of RRP grants reached almost PLN19bn after November 2025
- Zloty stable, upward correction of market interest rates
 

Welcome to the new year! May it bring all our readers joy and prosperity! This week, the key domestic topic will once again be monetary policy. On Tuesday, the MPC meeting begins, featuring the debut of a new Council member, Marcin Zarzecki, appointed by the President to replace Cezary Kochalski. His views on monetary policy are not yet known; we expect the first interviews after the MPC meeting concludes. The MPC decision will be announced on Wednesday. We assume that – in line with earlier suggestions – the Council will keep interest rates unchanged. On Thursday at 15:00, as usual, NBP Governor Adam Glapiński will hold a press conference explaining the decision. On Thursday morning, full CPI data for December will be released, and on Friday, core inflation data. Earlier, on Tuesday, we will get balance of payments data for November. (...)

Final data for December confirmed CPI inflation at 2.4% y/y and 0.0% m/m, compared with 2.5% y/y in November. In our estimate, core inflation stood at 2.8% y/y, slightly above November’s reading. Services inflation eased to 5.2% y/y from 5.3% y/y, while goods inflation declined to 1.3% y/y from 1.4% y/y. Downside pressure from imported goods and the relatively small increase in energy prices in 2026 may push CPI below 2% y/y in January. In our view, the MPC will remain in “wait‑and‑see” mode through February, after which it will consider further policy easing. By mid‑year, we expect the key rate to stand at 3.50%.

Recent positive data from the domestic economy have sparked a wave of optimism about the prospects for economic growth in Poland. For us, this optimism is nothing new. We wrote about the fact that the coming years would be marked by strong investment growth and that 2026 would be better than 2025 in terms of GDP growth before it became trendy. At the same time, it is worth bearing in mind that these will not be easy years, free from uncertainty, and that the acceleration in domestic growth will be moderate rather than spectacular. In our opinion, the increasingly popular slogan ‘GDP at four plus’ will materialise more likely in the form of nominal GDP level exceeding PLN 4 trillion, rather than in the form of average real GDP growth for the entire year above 4% (although this may not be far off) (...)

In September's Rates and FX Outlook:
 

• Poland’s GDP growth failed to accelerate in 2Q16, with investments surprising negatively (-4.9% y/y), and we think that the second half of the year will see no significant improvement in economic growth. Although private consumption is likely to gain strength in the coming quarters, supported by solid labour income and the new child subsidies, it may take time until investments recover, and the positive impact of net exports will be hard to maintain (export growth may decelerate and imports accelerate). We expect a more significant investment pick-up next year, but by then the impact of the 500+ child benefit programme on consumption will be dissipating. Therefore, we forecast that GDP will grow 3.1% in 2016 and 2.9% in 2017.