Economic news

• RATES: The MPC kept interest rates unchanged at its February meeting, marking the second consecutive month without a move. Policymakers continue to view Poland’s inflation outlook as favourable and still see room for further rate cuts, but opted to pause in order to assess incoming macroeconomic data from early 2026. We expect rate cuts to resume as soon as the March meeting, as suggested by NBP President Adam Glapiński. By then, the MPC will have access to a new round of NBP inflation projections, as well as January inflation and wage data, which we expect to be benign.
• LENDING: According to the latest NBP survey of credit committee officers, lending standards were further eased across all segments in the fourth quarter, mainly due to competitive pressure compressing loan margins. In the corporate segment, increased competition has not been cited as a reason for easing credit conditions this frequently since the second quarter of 2012. In addition, banks expect stronger demand for financing from large enterprises, driven both by fixed investment and by working capital needs. This points to an acceleration in private investment around the turn of the year, although in recent years this indicator has lost much of its usefulness as a predictor of investment activity.
• RATING: According to comments by Marcin Trajkovic, Fitch’s lead analyst for Poland, Poland’s rating situation has changed little since the outlook was revised downward in September last year. We therefore expect Poland’s rating to be affirmed at A– with a negative outlook following the review scheduled for 27 February. The analyst noted that Fitch typically maintains non-neutral rating outlooks for a period of one to two years. Key factors for the agency remain the stance of fiscal policy in Poland and the Ministry of Finance’s ability to stabilise public debt over the medium term. In addition, Edgardo Arispe – Fitch’s Head of Emerging Markets, pointed out that emerging economies – including Poland – have recently seen a compression in credit spreads, which supports fiscal stabilization. This is particularly relevant for Poland, given the relatively short average maturity of its government debt, which implies elevated refinancing needs.

The MPC says "see you in March"

As we mentioned in previous reports, the market was roughly split down the middle on the outcome of the February MPC meeting. Thus, anything would have been a surprise and had market repercussions. The Council decided to hold rates and this decision is fairly easy to explain ex post. The statement issued after the MPC meeting already had the basics of such an explanation, and the NBP president clearly explained it during the subsequent press conference. The MPC decided not to cut rates because nothing had changed since the last meeting: no new inflation data was released, wage growth surprised on the upside, and strong economic activity data saw light. However, the MPC does not consider the latter to be a major problem. As the Council operates on a data-dependent basis, further decisions will be made with more complete information. So, what are they waiting for on Świętokrzyska St.?

• On February 13th, Statistics Poland (GUS) will publish preliminary inflation data for January – with limited details, calculated using last year's weights, but taking into account the new COICOP classification (which Eurostat said it had next to no impact on Eurozone HICP).
• On February 19th, wage growth figures for January will be released. The National Bank of Poland wants to find out (and so do we) whether the surprising acceleration in wages in December was a one-off event or the beginning of an unfavorable trend.
• On March 4th, the March meeting of the Monetary Policy Council (RPP) will end, during which Council members will review the new inflation projection.
• On March 13th, GUS will publish inflation data for January and February, taking into account the revised weights and the new COICOP classification. Typically, the annual change in weights is not a major issue for monetary policy, but after last year's experience (when the revision of weights contributed to a 0.4 percentage point decrease in inflation), all observers of the Polish economy are more sensitive.
• On March 19, we will learn, among other things, data on wages in the enterprise sector in February.
• On March 31, the flash estimate of inflation for March will likely be published – this publication is not yet included in the GUS calendar, but we assume that, as in previous years, flash CPI estimates return to the regular calendar at the end of March.
• The April meeting of the Monetary Policy Council ends on April 9. 

In the above list, we have omitted Q4 GDP data and monthly data on economic activity, but their significance is simply smaller. What can be concluded from the list above? That by March, the Monetary Policy Council will already have known something about inflation at the beginning of the year (in our opinion, it fell considerably), doubts about wage growth in December will be resolved, and the Council will have a new staff projection at its disposal. All this makes March a convenient time to cut rates, and the NBP president has essentially announced such a move, although statements of this kind are always conditional. If we are right about the path of inflation and wages in the coming months, the incoming data should allow the Council to cut rates in April and May as well.

Comparing our CPI forecasts with consensus and NBP projections (% yoy)

Source: Macrobond, Pekao Research, Rzeczpospolita / Parkiet, NBP

In our opinion, the terminal rate in Poland is 3.25%, which is not far from the levels currently being considered by the Monetary Policy Council. In response to a question about the terminal rate, the President of the National Bank of Poland again pointed to 3.5% as a possible (but not certain) end to the easing cycle. Is it possible to go lower? President Glapiński did not rule it out. However, it is worth remembering that the MPC is currently operating on the assumption that average annual inflation will be 2.5% this year – this is the consensus, and these levels will most likely also be shown in the March projection. In our opinion, inflation will be lower this year, averaging 1.9%. This should pave the way for a slightly lower terminal rate than the Council currently assumes. 

Financial market update

Global market jitters have so far had little impact on domestic markets, with the exception of equities, which sold off sharply on Thursday before rebounding on Friday. Polish government bond yields were broadly stable, with a slight downward bias. The MPC’s decision to postpone rate cuts from February to March was taken in stride by markets. The zloty remained steadily strong, trading in a narrow range around 4.22 against the euro.

The coming week also looks set to be calm. Scheduled releases of Q4 2025 GDP data (tomorrow) and January CPI inflation (Friday) are of secondary importance. The GDP figure is already largely known based on full-year growth data, while the CPI release will be published in a truncated form using outdated basket weights. As a result, we do not expect significant moves either in the zloty or in Polish government bond yields.