Poland’s Monetary Policy Council keeps interest rates unchanged as ING economists predict temporary pause before rate cuts resume.
RPP Keeps Interest Rates Unchanged
Poland’s Monetary Policy Council did not change interest rates at its Wednesday meeting. The main NBP reference rate remains at 4%, while the lombard rate is maintained at 4.5%, the deposit rate at 3.5%, the rediscount bill rate at 4.05%, and the discount bill rate at 4.1%.
Economists Expect Temporary Pause in Rate Cuts
According to ING Śląski Bank economists, the pause in the interest rate cutting cycle is temporary and due to the lack of new official inflation data. They noted that industrial production and construction assembly growth in December significantly exceeded market expectations.
A preliminary GDP estimate for 2025 indicates economic growth in Q4 last year was close to 4% year-on-year.
Surprising Wage Data
The economists admitted that December’s wage growth data was surprising. The commentary stated: “In summary, the macroeconomic data since the last RPP meeting justified remaining in wait-and-see mode.”
Inflation and Future Rate Projections
Experts expect inflation to fall below 2% year-on-year at the beginning of 2026. They predict inflation will remain below the NBP target (averaging 2.1% year-on-year) throughout most of the current year, dropping to around 1.5% in some months.
The economists also expect wage growth to continue slowing and disinflationary pressure to persist from growing imports of cheap goods from China. They forecast the reference rate will be cut to 3.25% before the end of this year, with another rate cut expected in March.