Economic comment

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%.

At today’s conference NBP governor Adam Glapiński presented a similar view as in previous months. He repeated that interest rate cuts made in the previous year (175bp in total) represent a substantial monetary easing and that the room for further policy adjustment still exists, however is already small, and the central bank is already in the fine-tuning stage. (...)

Retail sales rose 3.1% y/y in November, slightly below market consensus and our forecast – both at 3.9% y/y. Seasonally adjusted sales increased by 1.1% m/m and 5.5% y/y, which is a solid result, only marginally below October’s 5.6% y/y rise, and confirms, in our view, that consumer demand remains quite strong. The growth rate of durable goods sales stayed very high, close to 15% y/y. We expect moderately fast growth in private consumption to continue in the coming quarters, with a stable contribution to GDP growth. December’s deterioration in business sentiment in industry was accompanied by improvement in transport, construction and retail trade. In November, agricultural product prices fell sharply, creating room for further easing in food price growth in CPI in the coming months.