Economic news

• RATES: The interest rate cut implemented in December last year was supported by nine members of the Monetary Policy Council (MPC), as reported in the Court and Commercial Gazette. The only dissenting vote came from J. Tyrowicz, who submitted a separate motion calling for a rate hike of 150 bps. This proposal did not receive the Council’s backing. Last week, an interview with NBP Management Board member A. Soboń was published. He stated that there is room for further interest rate cuts and that inflation will become durably anchored at the target in 2027 (while in 2026 it is expected to fluctuate around the target due to base effects). A few days later, A. Soboń indicated that the MPC would continue to take decisions on a meeting-by-meeting basis, but that macroeconomic conditions—particularly the stabilisation of inflation around the target over the forecast horizon—allows for further rate cuts. He also noted that discussions are ongoing at the NBP regarding the inclusion of silver in the central bank’s reserve assets.
• GDP: According to the flash estimate, Poland’s GDP increased by 3.6% in 2025, following growth of 3.0% in the previous year. The data released by Statistics Poland imply that GDP growth in the fourth quarter reached at least 4% yoy, driven by a strong contribution from private and public consumption, alongside somewhat disappointing performance of investment. We discussed the preliminary GDP figures for Poland in 2025 in more detail in a longer commentary.
• RETAIL SALES: Retail sales increased by 5.3% yoy in real terms in December last year, very close to market expectations. These data confirm the strength of the Polish consumer in 2025 and additionally contain some positive details (e.g. the strongest increase in sales of furniture and consumer electronics and household appliances in the current cycle). We discuss these figures in more detail in a separate commentary.
• PMI: Poland’s manufacturing PMI edged up in January to 48.8 points from 48.5 points in the previous month. Forecasts had pointed to a stronger increase, to 49.2 points.
• DATA: Moreover, alongside the latest Statistical Bulletin, Statistics Poland released its regular data package on the Polish economy, from which we highlight two indicators. First, the unemployment rate rose from 5.6% in November to 5.7% in December, in line with seasonal patterns, forecasts, and the preliminary estimate of the Ministry of Family, Labour and Social Policy. Second, new industrial orders declined by 30.6% yoy, reflecting a high base from the previous year (an increase of around 50% yoy).
• SENTIMENT: Last week, the NBP published the latest edition of its “Quick Monitoring” report, presenting the results of the quarterly survey on business conditions and corporate finances. The data point to the continuation of positive trends in demand and investment, a further easing of wage and, more broadly, cost pressures, and an improvement in corporate profit margins. We elaborate on the Quick Monitoring conclusions in the following parts of this newsletter.
• DEBT: The Ministry of Finance announced that the current level of financing of this year’s gross borrowing needs stands at 28%.

“Goldilocks” Economy According to the Quick Monitoring Survey

The latest edition of the NBP’s Quick Monitoring report, published last Monday, delivered an array of positive signals from the economy. Polish enterprises are rebuilding profit margins, and there is growing evidence supporting a continued slowdown in inflation. One of the few negative signals is the weakening of the labour market, which—at the same time—has the favourable side effect of supporting disinflation. Below we briefly summarize the key conclusions from the report.
Corporate conditions
The financial condition of Polish enterprises continued to improve towards the end of last year. Assessments of liquidity and debt servicing capacity increased in the fourth quarter, with more than 80% of surveyed firms reporting no problems in these areas. Moreover, financial results for the third quarter indicate a sharp rise in the share of profitable companies, returning to levels last observed in 2023.

Share of profitable enterprises (%)

Source: NBP
This improvement, however, was driven mainly by domestic rather than foreign sales. Capacity utilization also increased and is on an upward trend, reaching its highest level since 2022. In addition, the report provided early signals of the pick-up in investment activity that we expect this year. The number of loan applications submitted by Polish firms surged to levels last seen in 2023, a trend mirrored in indicators of planned changes in the scale of investment.

Left chart: Share of submitted/accepted loan applications (% SA)
Right chart: Planned investment adjustment in the coming quarter (balance, ppts, SA, weighted by employment)

 Source: NBP
At the same time, assessments of current business conditions have been improving steadily and are now at their highest level in four years. Nevertheless, firms remain only moderately optimistic about demand prospects over the next quarter and somewhat less optimistic regarding the outlook over the coming year. This likely reflects a slight increase in uncertainty indicators in the last quarter.

Price developments
From the perspective of inflation prospects, the Quick Monitoring survey suggested that developments are moving in the right direction. Polish firms expect continued disinflation not only in the prices of materials and commodities, but also in their own output prices. Labour costs, while easing, remain the main factor behind projected price increases. Notably, however, for the first time since 2023, firms reported a decline in the share of labour costs in total operating costs. In addition, the proportion of firms expecting further consumer price disinflation continues to exceed the share anticipating an acceleration in price growth, although this gap narrowed somewhat in the fourth quarter.

Price forecasts for the coming quarter (%)
 

Source: NBP
Labour market
The Polish labour market is cooling. In seasonally adjusted terms, an increasingly smaller share of firms expects wage growth, despite a reported increase in perceived wage pressure.

Planned pay raises in the coming quarter (%)
 

Source: NBP

This indicates a decline in employees’ bargaining power and a shift in the labour market towards an employer’s market, in which firms are less compelled to accommodate wage demands due to easing labour market conditions. This is consistent with weakening labour demand: according to the NBP survey, the share of firms reporting job vacancies declined slightly to 42%, remaining below the long-term average (close to 44%). Interestingly, a larger—and the largest since 2023—share of firms pointed to labour shortages as a barrier to growth, which appears to contradict signals from various sources indicating weakening demand for workers. This may, however, reflect shortages of appropriately skilled labour, a conclusion consistent with evidence from other datasets.
Overall, the results of the NBP survey are broadly in line with our macroeconomic outlook for Poland this year. Domestic demand is expected to remain stable, while economic growth will be driven by investment. Inflation should continue to decline, accompanied by a slowdown in wage growth due to subdued labour demand. 

Financial market update

Friday went down with no major changes: on the bond market, we saw minimal fluctuations in the yields of long-term securities, with no changes on the left-hand side of the curve; the zloty weakened slightly against the euro and significantly against the dollar (due to declines in EUR-USD, of course). Considering the bigger picture, both POLGB yields and IRS rates, as well as the EUR-USD exchange rate, are at multi-month or even multi-year lows; yet this does not imply there is no room for further declines. In the current conditions, however, capital seems somewhat unnerved, so that unless global markets regain some composition, we do not see much space for acquiring PLN assets. Current valuations of key assets are also related to a very ‘boring’ policy path by the Monetary Policy Council. The target rate of 3.5% is no longer as ironclad a consensus as it was a few weeks ago, but it is still the baseline scenario for the markets. Will this change? The MPC will cut interest rates this week and President Glapiński will be able to say a thing or two about the Council's plans for the coming months. However, we do not believe that the Council commits to more than one move forward.