MNI NBP Preview - May 2025: Locked & Loaded

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Executive Summary:

• Analyst consensus and market pricing point to a 50bp cut on Wednesday.
• The Governor guided that a repeat of dovish data could trigger an above-standard cut.
• We too expect a 50bp cut but see two-sided risks to this baseline scenario.

The National Bank of Poland (NBP) will reduce interest rates this week for the first time since October 2023. The recent streak of expectation-missing inflation, labour market and economic activity data have created a conducive environment for looser monetary policy. An abating risk of a rebound in energy prices in 4Q25 further supports the case for the long-awaited launch of an easing cycle. We align with consensus and market pricing in seeing a 50bp rate cut as the most likely outcome of this week’s MPC meeting but see two-sided risks to this baseline scenario. Although recent communications suggested that the MPC would likely decide between a 25bp and 50bp cut, it has previously demonstrated readiness to take the market off guard.