Economic comment

NBP president Adam Glapiński kept the door open for further monetary easing at today’s conference. He said the MPC is now likely to enter a wait-and-see mode to observe the situation for some time, but then it may resume cutting rates, if the data allow.

The next central bank’s decisions will remain strongly dependent on the new data and next NBP projections. Glapiński said his own view is quite conservative and he would be happy with maintaining the current 4.0% reference rate (which is “perfect”) for a longer period, but other MPC members may prefer to cut interest rates a little more, possibly to 3.75-3.50%. (...)

GDP growth accelerated in 3Q25 to 3.8% y/y and 0.9% q/q s.a. Investment growth accelerated surprisingly strongly (7.1% y/y), while private consumption growth was somewhat disappointing, slowing to 3.5% y/y. These two components of GDP thus reversed the shift that took place in Q2, when investment slowed significantly and consumer demand accelerated. We see this as confirmation that the investment recovery cycle we have long anticipated is materialising, with its peak likely to occur in 2026. We expect Polish GDP growth to remain high, approaching 4% y/y in the coming quarters.

CPI inflation surprised to the downside again, falling in November from 2.8% y/y to 2.4% y/y, versus market consensus and our forecast at 2.6% y/y. The main source of the downward surprise must have been core inflation, which – according to our estimate – dropped in November from 3.0% y/y to 2.6–2.7% y/y. It looks like inflation may remain below 2.5% target for the better part of 2026. Therefore, we are changing our view on monetary policy outlook. We think that a 25bp interest rate cut in December is now very likely. It may be followed by a two-month pause, and in March the MPC may resume the easing cycle and – moving in small steps – bring the NBP key rate down to 3.5% or lower.