Poland’s interest rates steady at 5.75% amid inflation concerns, with cuts unlikely until 2025. Inflation remains a challenge, but economic growth is projected at 3.6% for 2025. The central bank focuses on balancing stability while supporting Poland’s recovery.
Central Bank Holds Steady Amid Inflation Concerns
Poland’s National Bank (NBP) has decided to keep its benchmark interest rate at 5.75% during the January meeting. The rate has stayed the same since October 2023, reflecting the central bank’s cautious approach to monetary policy amid ongoing inflation concerns.
NBP President Adam Glapiński stated that interest rate cuts are unlikely until at least late 2025. Inflation risks and external pressures, like a strong US dollar driven by the Federal Reserve’s hawkish policies, are contributing to this cautious outlook.
Inflationary Pressures and Economic Indicators
Poland’s inflation rate remained at 4.7% in December 2024, unchanged from November and slightly below the projected 4.8%. Some sectors saw stability, while others experienced rising costs.
Utilities and housing costs rose to 10.1% in December, up from 9.9% in November. Health expenses increased to 5.5%, compared to 5.3% the previous month. Meanwhile, transport costs declined more slowly, falling by -3.3%, compared to -4.1% in November. Food and beverage prices held steady at 4.8%, and recreation costs dropped slightly to 5.5% from 6.1% in November.
With energy price caps set to expire in 2025, inflationary pressures are expected to worsen, reinforcing the central bank’s decision to keep interest rates steady.
Polish Economy Poised for Growth in 2025
The European Commission projects Poland’s economy will expand by 3.6% in 2025, up from 3% in 2024. Growth is expected to stabilize at 3.1% in 2026. Private consumption and investments, including those tied to EU-funded projects and flood recovery efforts, will drive growth.
As key trading partners regain economic momentum, Poland’s exports are expected to recover, further boosting the economy. However, inflation is forecast to average 4.7% in 2025, up from 3.8% in 2024, before easing to 3% in 2026.
Poland’s unemployment rate is expected to decline slightly, averaging 2.8% in 2025 and 2.7% in 2026, compared to 2.9% in 2024.
Balancing Stability and Future Challenges
The NBP’s decision to maintain interest rates highlights its commitment to managing inflation while supporting economic growth. As Poland navigates inflation and rising costs, the central bank remains focused on stability, positioning the economy for a sustainable recovery.