MNI NBP WATCH: Cuts Rates By 25BP, Highlights Global Risks

The National Bank of Poland reduced key interest rates by 25 basis points on Wednesday, its first cut since December 2025, while highlighting increased global uncertainty and energy price rises linked to the attack on Iran. (See MNI NBP WATCH: Cut In Balance As Uncertainty Grows on Iran)

The decision to reduce the reference rate to 3.75% after a period of “wait-and-see” came as inflation fell from 2.4% in December to 2.2% in January, amid labour market easing and what it called “markedly” lower wage growth. 

CPI inflation is seen averaging 1.6-2.9% this year, compared with the 1.9-4.0% projected in November, 1.1–3.7% in 2027 (versus 1.1– 4.1%), and 0.9–4.0% in 2028, according to March’s macroeconomic forecasts, the cut-off point for which was Feb 19.

“Taking into account inflation developments and its outlook for the subsequent quarters, in the Council’s assessment, it became justified to adjust the level of the NBP interest rates,” the NBP said in a statement.

“Fiscal policy, expected recovery of demand in the economy, further developments in wage growth as well as macroeconomic situation abroad – including changes in global commodity prices and inflation, amid geopolitical tensions – remain risk factors for inflation outlook.”.

GDP growth of 3.1–4.7% is expected in 2026, up from the 2.7–4.6% projected last year, moderating to 2.0–3.8% in 2027 (from 1.5–3.7%) and 1.8–4.1% in 2028.