MNI NBP WATCH: Wait-And-See Before March Inflation Projections

The National Bank of Poland is likely to pause its undeclared easing cycle on Wednesday, with the reference rate held at 4%. But another dip in the monthly inflation print may bring forward discussion of another quarter-point cut, with further loosening set for the spring. (See MNI EM NBP WATCH: Rate Cut 25Bps To 4% On Lower Inflation Data)

Domestic demand, including consumption and investment, retail sales, industry, construction and assembly production all made positive contributions to annual output last year. Wage growth - the pace of which has been regarded by the Monetary Policy Council as a source of upside risk for some time - slowed towards the end of 2025, the Bank said in December.

Governor Adam Glapinski even pointed to a Goldilocks scenario, with GDP for the year expected in the region of 3.8%, and interest rates now at the “perfect” level. Glapinski was also clear, however, that while he would be content to see interest rates stand pat for some time, other MPC members view the outlook as even more benign, with a terminal level of 3.75-3.50% in prospect.

Geopolitical events remain a source of uncertainty, while heightened services inflation is still posited as source of upside inflation risk in official communications. 

The NBP lowered rates by 25 basis points last month as headline inflation slowed from 2.8% in October and 2.4% in November - well within the 2.5% +/-1pp target range, while core inflation was expected to have eased.  (See MNI EM INTERVIEW: Jury Out On 2026 Inflation - NBP's Tyrowicz)

With the next Council rates decision scheduled for Feb 4, a period of wait-and-see is probably the order of the day, with the publication in March of new staff macroeconomic projection likely be identified - at least privately - as the appropriate moment at which to tweak rates again. 

As always, Thursday's press conference will be key to gleaning anything approaching clear forward guidance.