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Polish central bank expects CPI to return to target range by Q3 2026

Polish central bank expects CPI to return to target range by Q3 2026

According to Friday's projection, the inflation rate in Poland will reach the target range of the central bank in the third quarter 2026. It will stay there until the end of 2027.

The National Bank of Poland has set an inflation target of 2.5%, plus or minus a percentage point. The price growth rate in January was 4.9%, and preliminary statistics from the Statistics Office indicate that it was also 4.9% for February.

The first half of 2025 will see the highest inflation (5.4% for the first quarter, and 5.2% for the second), before it begins to decline in the third.

The central bank stated in a recent report that "regulations in the energy sector will increase CPI inflation in 2025, and in the first half 2026."

The government's maximum electricity prices are in effect until the third quarter 2025. It has yet to decide whether or not they will be extended.

According to the projection published in March, the inflation rate in 2025 is lower than the one predicted in November (5.6% vs. 4.9%), but the estimates for next year have been increased to 3.4%, from 2.7%.

A projection shows that Poland’s GDP will grow faster in 2025, from around 3% to 3,7%. This will be supported by an increase in funds coming from the European Union as well as the National Recovery Plan.

In 2026 the GDP growth rate will be 3.4% and in 2027 it will be 2.5%.

Adam Glapinski, the Polish central bank governor, said that there are no current reasons to cut interest rates due to inflation.

The central bank stated that the projection was prepared using data up to 27 February 2025. It assumed unchanged NBP rates, including a reference rate of 5.75 percent. (Reporting and editing by Philippa Flletcher; Pawel Florkiewicz)

(source: Reuters)