Thursday, 26 February 2026
As the Monetary Policy Council prepares for its March meeting, the broader macroeconomic backdrop in Poland broadly aligns with the themes outlined in the commentary, according to data and assessments from independent institutions such as the National Bank of Poland (NBP), Statistics Poland (GUS), the European Commission and international financial institutions.
Inflation in Poland has declined markedly compared with the peaks recorded in previous years. Recent readings published by GUS show that price growth has moved closer to the NBP’s medium-term target of 2.5 percent, with a permissible deviation band of plus or minus one percentage point. This places current inflation within, or close to, the central bank’s accepted range, supporting the argument that the tightening cycle has largely achieved its primary objective of curbing excessive price growth.
At the same time, core inflation, which excludes volatile components such as energy and food, has proven more persistent. NBP reports and MPC minutes have repeatedly highlighted services prices as slower to adjust to earlier interest rate increases. This is consistent with patterns observed across other European economies, where labour-intensive services tend to react with a lag to tighter monetary conditions. The durability of this disinflation process remains a central consideration for policymakers.
Real interest rates, which reflect nominal rates adjusted for inflation, have turned positive as inflation has fallen while policy rates have remained elevated. In standard monetary policy analysis, positive real rates indicate restrictive conditions, which can weigh on credit growth and investment. Data from the NBP and banking sector reports show moderate lending dynamics, suggesting that monetary conditions remain relatively tight.
Economic growth in Poland has been steady but not excessive. GDP data and European Commission forecasts indicate moderate expansion rather than overheating. Wage growth, while still robust in nominal terms, has shown signs of stabilisation compared with previous acceleration phases, reducing the immediate risk of a wage-price feedback loop. These developments provide support for arguments that a cautious reduction in interest rates could be considered without undermining price stability.
However, several risk factors cited in the commentary are also consistent with concerns raised by professional institutions. Energy prices and regulated components of the consumer basket remain potential sources of volatility. Fiscal policy measures, particularly if expansionary, could sustain domestic demand and complicate the inflation outlook. Moreover, the international environment remains relevant, as differences in interest rate levels between Poland and major economies influence capital flows and the exchange rate of the złoty, which in turn affects imported inflation.
Financial market reactions described in the commentary are broadly in line with established market dynamics. A reduction in policy rates would typically support lower short-term bond yields and ease borrowing costs for households and businesses. Currency markets could react with moderate depreciation pressure if rate differentials widen relative to other central banks. Equity markets often respond unevenly, with interest-sensitive sectors potentially benefiting while banks may face pressure on margins.
Overall, independent data confirm that inflation has eased substantially and that the economy is no longer in a phase of acute overheating. At the same time, persistent service price pressures, fiscal developments and external risks justify a cautious approach. Whether the Monetary Policy Council opts for a modest rate cut or signals future easing while holding rates steady, the decision will likely hinge not only on current inflation readings but on the perceived durability of the disinflation process in the months ahead.
