Economic news

• GDP: he growth of the Polish economy in Q3 2025 was revised upwards from 3.7% to 3.8% YoY, according to the second release from the Central Statistical Office. Private consumption was the main contributor, although its growth was slightly below expectations (3.5% vs. 4.5% YoY). Private investment surprised strongly to the upside, growing by 7.1% YoY. Net exports contributed positively to GDP growth (+0.2 pp), while inventories subtracted 1.0 pp.
• INFLATION: The November flash inflation rate came in at 2.4% YoY, significantly below the consensus forecast of 2.6% YoY. The surprise had no single cause — the decline in prices was broad-based, with core inflation falling from 2.9% to 2.7–2.8% YoY. The November reading is also the first one below the NBP’s inflation target of 2.5% since April 2024. This increases the likelihood of another 25bp rate cut at this week’s MPC meeting in December.
• INTEREST RATES: The MPC was nearly unanimous in its decision to cut the policy rate by 25bp in October, according to the meeting minutes. Nine members voted in favour, with only one against — Joanna Tyrowicz. We believe there is broad consensus among MPC members to continue loosening monetary policy, and we expect another 25bp cut this Wednesday.
• RETAIL TRADE: Retail trade grew by 5.4% YoY in October, surpassing market expectations of 4.0% YoY, despite a high base from the previous year. Acceleration was visible across most product categories, particularly durable goods. Car sales rose by 15.6% YoY, and furniture and consumer electronics by 14% YoY. October’s data aligns with the broader picture of positive consumer sentiment.  
• MONEY MARKET: In October, the M3 money supply was 10.6% higher than a year earlier, broadly in line with forecasts. There is solid growth in household and enterprise loans this year, alongside a slowdown in cash in circulation to a 3-year low of 8.6% YoY.
• LABOUR MARKET: Poland’s registered unemployment rate remained at 5.6% in October, while the LFS-based rate rose from 2.8% to 3.1% in Q3 2025. Overall, the labour market remains in good condition. The total number of employed persons reached a record-high of 17.4 million last quarter, supported by a steady inflow of migrant workers — their number reached nearly 1.3 million in October, according to the Social Insurance Institution.

Signals of recovery in corporate financial results

Recent days have brought a lot of positive news from the Polish economy – after a solid September, October turned out to be an even better month in terms of macro data (retail sales, industrial and construction output). This positive picture was confirmed by the published financial results of enterprises for the third quarter of 2025. Below, we briefly summarize the financial condition of Polish companies in the past quarter.

Firstly, the third quarter brought a continuation of revenue growth among domestic firms after more than a year of declines. Costs also increased, but at a slightly slower pace than revenues, and the past quarter saw a wider gap between the two variables in favour of corporate results. As a result, the net financial result of Polish enterprises reached a level 20% higher than a year earlier.

Net financial results of Polish companies (% yoy)

Source: Macrobond, Statistics Poland, Pekao Research

Secondly, it is worth highlighting the changing structure of costs incurred by domestic companies. The fastest-growing categories in terms of their share in total costs remain “external services” and “wages”, both strongly driven by the pace of salary growth. The positive news is that the “expansion” of these categories within the cost structure is slowing, and with wage growth clearly easing, the pressure from labour costs should diminish in the coming quarters. However, it does not change the fact that over the past three years the combined share of these two categories in total costs has risen from just under 35% to over 40%.

Thirdly, we are seeing a continued, though modest, improvement in profitability ratios among Polish firms, which have been significantly strained over the past two years. Early signs of recovery were already visible at the beginning of this year, and the third quarter data confirm that the financial condition of domestic companies continues to improve. The same can be said of liquidity indicators, which, after more than a year of stagnation, are beginning to improve.

Gross turnover profitability ratio (%, annual moving average)

Source: Macrobond, Statistics Poland, Pekao Research

Fourthly, corporate investment is slowly returning to positive territory. After a weak 2024 and the first half of 2025, the third quarter brought a rebound particularly in the “machinery and equipment” category, with some improvement also seen in “transport equipment”. These are not impressive numbers, but they may be viewed as early signs of a modest recovery in private investment, which is expected to pick up more noticeably next year. It is also worth noting that the period of sharp declines in investment in the manufacturing sector – the most important sector overall, and one that had been operating in stagnation in recent quarters – has finally come to an end.

Corporate investment expenditures (% yoy)

Source: Macrobond, Statistics Poland, Pekao Research

Overall, it appears that Polish enterprises are tentatively entering better times. The spectre of elevated inflation is receding into history, labour costs are easing, and domestic demand remains robust – there are strong arguments for a continued improvement in the situation of domestic firms. Along with the series of positive macroeconomic data released earlier, corporate results support our forecast of GDP growth starting with a digit '4' in 2026.

Financial market update

Friday's surprise inflation reading immediately translated into a drop in Polish bond yields — by about 15 bps across the entire curve. This marked the culmination of a longer rally in Polish bonds, which brought the 10-year yield down from around 5.5% to below 5.2%. However, this does not mean that the room for further declines has been exhausted. Bond yields are still relatively high (4% on the 2-year), considering where interest rates are today and where they might be in the coming months (we expect the policy rate to fall to at least 3.5% in H1 2026). While after such a strong move on Friday a correction can be expected today, we anticipate further strengthening of Polish bonds over the week. In addition to the surprise from lower inflation, the prospect of an end to the war in Ukraine is also supportive for POLGBs. The vision of peace is also boosting the zloty in the short term, suggesting a potential move of EUR/PLN back towards 4.22.