Poland: Central Bank decides to cut rates in December
No surprises at final 2025 meeting: At its meeting on 2–3 December, the Central Bank (NBP) decided to cut the NBP reference rate by 0.25 percentage points to 4.00%. This marked the fifth consecutive rate reduction and was in line with market expectations.
Inflation comes in below target, GDP growth remains solid: The NBP reduced rates again as inflation fell to the 2.5% target mid-point in November and GDP growth remained robust in Q3. Additionally, both wage growth—a key pain point for the Central Bank—and employment in the enterprise sector fell, which is set to ease inflationary pressures further ahead.
More rate cuts on the horizon: Going forward, most of our panelists see 25 basis points of further rate cuts in Q1 2026 and additional reductions by the end of 2026. Our Consensus is for inflation to remain within the Central Bank’s tolerance range and for the zloty to hold up against the EUR through Q4 2026, leaving room for further monetary policy adjustments by the NBP. Softer-than-expected GDP growth poses a downside risk to the reference rate.
The NBP is set to reconvene on 13–14 January.
Panelist insight: Erste Bank’s Jakub Cery commented on the outlook:
“We anticipate a pause in rate reductions during January and February, with a resumption of easing likely in March via a 25 basis point cut. This decision will depend on the updated inflation and growth forecasts, which are expected to reveal a more moderate inflation path than the Council’s current assumptions. If our projections materialize, we expect an additional rate reduction in Q2. Moreover, should inflation fall below the central bank’s target, it could prompt even deeper cuts, potentially bringing the key interest rate to the lowest level in the CEE region.”