Poland’s National Bank (NBP) has decided to keep its benchmark interest rate at 5.75%, continuing the policy it adopted in October 2023. This cautious approach aims to manage inflation risks, which remain a significant concern.
Central Bank Holds Rates Amid Inflation Concerns
The NBP’s decision reflects its ongoing effort to control inflation, which is still above target. NBP President Adam Glapiński has indicated that interest rate cuts are unlikely before late 2025. The central bank is focused on navigating persistent inflation pressures and external economic challenges. This move aligns with analysts’ expectations and indicates a cautious, wait-and-see approach to further economic changes.
Economic Pressures and Inflation Dynamics
Inflationary concerns persist, driven by rising costs in key sectors. The US dollar’s strength, supported by the Federal Reserve’s policies, has added pressure. Additionally, the expiration of Poland’s energy price caps in 2025 could further elevate inflation, making rate cuts impractical for now.
In December 2024, inflation held steady at 4.7%, slightly lower than the projected 4.8%. Housing costs rose by 9.9%, and utilities surged by 10.1%. However, transportation costs improved slightly, falling to -3.3% from -4.1% in November.
Poland’s Economic Outlook for 2025
The European Commission projects Poland’s economy will grow by 3.6% in 2025, up from 3% in 2024. Private consumption and EU-funded investments will drive this growth. Export activity is also expected to recover as Poland’s major trading partners strengthen their economies.
Inflation is expected to average 4.7% in 2025, higher than the 3.8% in 2024. However, it is projected to ease to 3% by 2026. Poland’s unemployment rate should drop slightly, reaching 2.8% in 2025 and 2.7% in 2026, down from 2.9% in 2024.
Steady Policy Amid Economic Challenges
Poland’s steady interest rate policy reflects the NBP’s commitment to maintaining price stability while addressing inflation. With a positive GDP outlook and manageable unemployment, Poland is on track for gradual recovery and growth in the coming years.