Economic comment

Polish MPC kept interest rates on hold, with the reference rate at 3.75%. The decision was quite obvious, given a recent spike in commodity prices that pushed CPI to 3% in March and raised uncertainty about the inflation and economic outlook. Plus, several MPC members, including the ones perceived as the most dovish, clearly suggested recently they were not going to change monetary policy anytime soon.

The official post-meeting statement pointed to significant uncertainty about the global economic outlook, repeated that next decisions will be driven by the upcoming information and emphasised that the outlook heavily depends on geopolitical situation and commodity market developments. (...)

Rising fuel prices pushed inflation up to 3% y/y  in March. A slight decline is likely in April, but the size of this move will depend on the behaviour of commodity prices in the coming weeks. Given developments in the Middle East, we currently assess that even in a scenario of a relatively rapid de-escalation of the conflict, the return of commodity prices to lower levels will be gradual. As a result, the inflation path for the coming months is shifting upwards, which will most likely rule out any interest rate cuts this year.

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.