Economic news

• UNEMPLOYMENT: According to the data from the Ministry of Family, Labour and Social Policy, the registered unemployment rate rose from 5.8 per cent in July to 5.9 per cent in August, exceeding forecasts that had predicted it would stabilise. However, we would not attach too much importance to this negative surprise – in recent months, the first decimal place of the unemployment rate has been determined by rounding. The unemployment rate is therefore sensitive to minor revisions in the number of people in the labour force, and the final reading from the Central Statistical Office (Statistics Poland, GUS) may well bring such a revision. 
• MONETARY RESERVES: Official reserve assets rose to EUR 263 bn (USD 305 bn) in August from EUR 256 bn (USD 295 bn) a month earlier, according to the National Bank of Poland.
• INTEREST RATES: At its first meeting following the summer recess, the Monetary Policy Council (RPP) decided to leave interest rates unchanged at 3.75 per cent, in line with the consensus forecast. It was difficult to speculate on the reasons behind this decision based on the post-meeting statement, which was rather enigmatic in nature. The Council noted an acceleration in economic growth in Q2 2026, attributed the rise in inflation in August primarily to the impact of fuel prices, and also noted a likely rise in core inflation. The concluding section of the statement, containing forward guidance, repeated the wording from the July statement, emphasising the importance of geopolitics, fiscal policy, domestic economic activity and wage growth. In our view, there is one further factor not mentioned in the report that works against interest rate cuts: the decisions of central banks in key markets. Last week, ECB conducted its second hike this year, and we foresee two hikes by the Fed. Eventually, during his regular press conference on Thirsday, NBP Governor A. Glapiński suggested that interest rates in Poland would remain unchanged for some time – at least until the middle of next year – and that the rating agencies would not change their assessment of Poland’s creditworthiness. We discuss this in more detail later in the report.
• MPC COMMENTS: The Monetary Policy Council will have to consider raising interest rates this year or in early 2027 if forecasts indicate that inflation will remain above 4 per cent for an extended period, said MPC member Ludwik Kotecki. Another MPC member, Ireneusz Dąbrowski, assessed that interest rates are most likely to remain unchanged at 3.75 per cent until the second quarter of 2027. In our forecasts, we go even further – we expect interest rates to remain unchanged until the end of 2027.

Rates unchanged, rating unchanged

Following the Monetary Policy Council’s decision – which, in line with market expectations, left the reference rate at 3.75 per cent at Wednesday’s meeting – and the publication of a rather terse post-meeting statement, we eagerly awaited the press conference by the Governor of the National Bank of Poland, scheduled for Thursday. We had hoped that A. Glapiński would lift the veil of secrecy surrounding the Monetary Policy Council’s response function, and perhaps also decide to provide a forecast regarding the path of interest rates – so-called ‘forward guidance’. As for the first point, we did not learn much that was new, whilst the forward guidance took on a very clear form: according to the Governor of the NBP, interest rate cuts are ruled out until the end of the year; rate hikes will occur only if the economic situation compels the MPC to do so; and, apart from that, interest rates in Poland are most likely to remain unchanged for a prolonged period, i.e. at least until mid-2027. In particular, we learnt that:

• According to the Monetary Policy Council (RPP), the factors reflecting domestic inflationary pressure are moderate. Whilst economic growth in Poland remains robust (3.9 per cent year-on-year in Q2 2026), but with the investment boom coming to an end, the National Bank of Poland (NBP) expects a marked slowdown in economic growth in 2027. At the same time, the labour market remains subdued, and wage growth slowed in the last quarter – we are not seeing rising wage inflation.
• At the same time, the rise in inflation since the start of the year is attributable to global supply shocks – which are driving up fuel prices – that are independent of the domestic economic situation. Their occurrence is independent of the stance of monetary policy in Poland.
• Governor Glapiński emphasised that in the coming quarters, domestic demand factors may be a key driver of inflation. How is this possible in an environment of supply shocks? Quite simply – the extent to which the oil shock spills over into the broad CPI index will depend on the domestic economic situation.
• The MPC recognises that major central banks around the world are currently shifting towards monetary tightening. A. Glapiński emphasised that the interest rate differential may lead to capital outflows from Poland (which in turn will generate pressure for the PLN to depreciate), but this will not be a key factor in the MPC’s future decisions.
• Referring to the so-called ‘policy mix’ – that is, the interdependence between monetary and fiscal policy – Governor Glapiński noted that whilst an expansionary fiscal policy constitutes a risk factor for the Monetary Policy Council, the stabilisation of the deficit in 2026–27 means that no additional inflationary pressure will arise from fiscal policy.

Referring to the expected future path of interest rates, the Governor of the National Bank of Poland emphasised on several occasions that the Monetary Policy Council will make decisions based on current macroeconomic data and, as a rule, will not tolerate CPI growth exceeding the inflation target. He also stated that, according to the NBP’s forecasts, we will see an inflation rate above 3.5% y/y as early as the coming months (in our view, this will be 3.7% y/y in September), but this rise will be driven primarily by energy price inflation, i.e. a non-core factor. Ultimately, based on the weighting assigned by A. Glapiński to the breakdown of inflation growth into exogenous (energy) and endogenous (core) factors, we believe that the Monetary Policy Council is inclined to keep interest rates unchanged for an extended period, provided that 1) there is no significant deviation from the inflation target range, primarily due to drastic rises in energy prices, and 2) the labour market situation does not lend credence to a scenario of persistently higher inflation.

NBP policy rate vs Pekao forecast and market forecast

Source: Macrobond, LSEG, Pekao Research

Perhaps the most interesting aspect of yesterday’s press conference was a statement concerning not so much interest rates as the credit rating. This Friday (18 September), Moody’s may review Poland’s credit rating. Governor Glapiński stated, however, that to the best of his knowledge, investors can rest assured that Poland’s credit rating will remain unchanged. He did, however, warn that unless Poland’s fiscal position improves, a downgrade could occur after 2027.

Financial markets update

Neither the international environment (risk aversion) nor domestic conditions (the Monetary Policy Council’s dovish stance, an expansionary budget for 2027) are favourable for Polish assets. This is particularly evident in government bond yields, which are already sky-high and continue to rise. The 10-year yield has now reached around 6.3 per cent, up from 6.14 per cent at the start of last week. The sell-off is also affecting the zloty, which started last week at 4.31 against the euro and is now trading 2 groszy higher. The scale of these movements is, however, small given the nervousness in the global market. This week, however, we are likely to continue in the same direction. The escalation in the Middle East is a very recent development that the markets have not yet fully digested. The base-case scenario for this week is a continued slow depreciation of the zloty and a rise in POLGBs yields. The most important event on the market will be the Ministry of Finance’s bond auction (on Wednesday).

Review of upcoming macroeconomic figures

14 September, July current account balance, Pekao: -2,500 million EUR Consensus: -2,129 million EUR

The outbreak of the fuel crisis and the subsequent sharp rise in the prices of imported energy commodities have, in recent months, been pushing the trade balance back towards deeper deficits (due to a deterioration in the terms of trade).

15 September, CPI inflation for August, preliminary estimate: 3.4% y/y

According to the preliminary estimate, CPI inflation accelerated significantly in August to 3.4% y/y from 3.0% in July, primarily due to rising fuel prices, whilst food prices continued to fall. The data do not reflect the impact of the CPN programme, which was only resumed in the last two weeks of August, after the Central Statistical Office (GUS) had already completed its price surveys. The rebound in core inflation to around 3.2–3.3% y/y is a cause for concern.

18 September, Industrial output (August), Pekao: 7.2% y/y Consensus: 6.1% y/y

An acceleration in industrial output can be expected due to a more favourable pattern of working days and the relatively small scale (compared with the previous decade) of seasonal shutdowns in the automotive industry.