MNI NBP WATCH: Data Complicates Governor's Hawkish Case

The National Bank of Poland is expected to deliver another policy hold this week to keep the reference rate at 5.75% for a seventeenth successive meeting, but opinion within the Monetary Policy Council is turning as incoming data adds weight to the case for cutting.

CPI inflation of 4.9% last month was below NBP expectations, as upward price pressures cited by Governor Adam Glapinski, who has repeatedly referenced last year’s partial removal of the energy price cap and the expectation of higher tariffs this year, have failed to materialise.  (See MNI EM INTERVIEW: NBP Will Cut Before 2026 - Ex-FinMin Official)

Wage growth, highlighted in official communications as driving rapidly rising services prices and which the central bank forecast at 10.1% in the first quarter, declined from 9.2% in January to 7.9% in February. Core inflation moderated to around 3.5%.

Going by public statements, a clear majority of the 10-person MPC now back at least discussing rate cuts in July, posing a communications challenge for Glapinski.

Most likely, the publication of July’s Inflation Report will provide an opportunity to inaugurate the easing cycle, until which time the NBP governor may offer traces of the changing sentiment among his colleagues while reinforcing the need for continued caution.