Economic Analysis

In today's Eyeopener:

• Today, Polish MPC starts its two-day meeting
• GDP rose 4.0% y/y in 4Q25, consumption increased 4.2% y/y and investments by 4.7% y/y
• Polish manufacturing PMI unexpectedly fell in February, at odds with European indices
• CEE currencies weaker, bond yields pushed higher by worries about inflation outlook

The coming week in Poland will be sponsored by letters: PMI, GDP and the MPC. On Monday morning, we will see the February reading of the manufacturing PMI. (...) An hour later, Statistics Poland (GUS) will release detailed GDP data for 4Q25. (...) On Wednesday, the Monetary Policy Council will conclude its meeting. Before taking its interest rate decision, the Council will see the results of the new NBP projection. We assume that the MPC will decide to cut interest rates again by 25bp, in response to the slight decline in CPI inflation in January and to the projection results, which will most likely confirm the stabilisation of inflation in the coming quarters close to the 2.5% target . (...)

GDP growth in 4Q25 amounted to 4.0% y/y, and - after seasonal adjustment - to 1.0% q/q, confirming the GUS flash estimate. Growth in both consumption and investment exceeded 4% y/y. In 1Q26, growth momentum may ease slightly due to a harsh winter, which dampened economic activity in January and most likely also in February. However, we still expect a recovery in subsequent quarters, implying that full-year GDP growth should remain close to 4%, making Poland a leader in economic performance within the EU.
A new risk factor for the economic scenario is the conflict in the Middle East, which generates risks of higher inflation and slower economic growth. At this stage, however, it is too early to assess how strong its impact may be. For now, we leave our 2026 GDP forecast unchanged at 3.9%.

In European industry we are seeing signs of a recovery, suggesting that domestic exporters may enjoy a modest tailwind this year, not least due to the acceleration of the German economy. Domestic data confirm rising activity across most sectors. Demand for credit is clearly increasing. We continue to expect solid consumption growth to be maintained and a strong acceleration in investment. On the other hand, an exceptionally harsh winter is generating additional costs for household and local government budgets, which over time may weigh on their spending, while delays in the disbursement of funds from the Recovery and Resilience Facility mean that even the government is now pointing to the risk that grants may not be fully utilised. As a result, we keep our GDP forecast for this year broadly unchanged, with average growth at 3.9%. (...)