MNI NBP WATCH: Hold Seen As NBP Pivots Back To 'Wait-And-See'

The National Bank of Poland is expected to hold interest rates this week as it waits to assess the strength of any second-round effects from energy price rises and global uncertainty arising from the conflict in the Middle East.

The NBP cut the reference rate by 25 basis points to 3.75% in March, after inflation fell to 2.1%, amid labour market easing and “markedly” lower wage growth. It upwardly revised its GDP growth projections 2026 and 2027, but revised its view of inflation meaningfully lower for this year, to 1.6-2.9%, compared with 1.9-4.0% in November. 

The projections, however, were based on market data with a cut-off date of February 19, and policymakers emphasised that “changes in global commodity prices and inflation, amid geopolitical tensions – remain risk factors for inflation outlook.” (See MNI NBP WATCH: Cuts Rates By 25BP, Highlights Global Risks)

Headline inflation was 3% in March as fuel prices added 0.8 of a percentage point to the overall pace of price growth, though core has so far remained relatively flat, at around 2.5%.

The NBP is therefore likely to return to a policy of “wait and see” in April - a position that may well remain true for months ahead.