Economic comment

In February, retail sales at constant prices increased by 5.0% y/y, marking an acceleration from 4.4% y/y in January. The market had expected a reading of 6.1% y/y, while our forecast stood at 4.0% y/y. Sales of durable goods rebounded to 4.8% y/y after a weak January reading of 2.4% y/y. Sales of other goods rose by 5.0% y/y, compared with 4.8% y/y in January. If the conflict in the Middle East de-escalates relatively quickly, average real retail sales growth this year could reach around 4%, in our view.
In 4Q25, revenues of large and medium-sized companies increased by 3.0% y/y, while costs rose by 2.5% y/y. The four quarter average margin edged slightly higher (to 4.6% from 4.5% in 3Q). Investment by large and medium-sized companies in 4Q25 showed a clear acceleration to 8.8% y/y from 2.9% y/y in 3Q in real terms. Sectors more dependent on EU funding saw investment growth accelerate to 16.2% y/y from 14.2% y/y, while in the remaining sectors it improved to +6.3% y/y from -2.6% y/y.

February data were mixed. Industrial output rose by 1.5% y/y following a decline and slightly outperforming market expectations, while seasonally adjusted output increased by 0.6% m/m. Growth was driven by mining (19.6% y/y) and energy (13.5% y/y), whereas manufacturing was almost flat (0.2% y/y). At the same time, construction activity disappointed sharply, with the decline deepening to -13.7% y/y. The labour market remained relatively stable: wages in the enterprise sector increased by 6.1% y/y, below expectations, while employment continued to fall at -0.8% y/y. PPI inflation rose to -2.3% y/y from -2.6% y/y. However, rising global energy commodity prices suggest the index could shift quickly towards the -1% to 0% y/y range in the coming months. Overall, the data do not appear to generate price pressures requiring a response from the MPC, instead allowing time to assess the implications of the Middle East conflict within the wait-and-see approach signalled in recent comments by Council members.

Inflation in Poland stood at 2.1% y/y in February, in line with the market consensus and 0.1 pp above our forecast. The change in CPI basket weights led to a revision of January inflation from 2.2% y/y to 2.1%, and from 0.6% m/m to 0.7%. Core inflation may have remained at its December level of 2.7% y/y in both January and February, with a chance of a slight decline in February.
CPI data for January and February should not have a material impact on the MPC’s decisions, inter alia due to uncertainty over the consequences of the war in Iran and the Council’s shift into a “wait-and-see” mode, already signalled by several of its members.