Economic news

• CPI: The flash reading of domestic CPI inflation for April came as a negative surprise, showing a rise to 3.2% yoy from 3.0% in March. The biggest surprises concerned a smaller-than-expected fall in fuel prices, a rise in energy prices, and in core inflation. The data suggest mounting price pressures across an increasingly broad range of the basket in response to the current fuel crisis. The scenario of a prolonged crisis is slowly becoming the baseline scenario. By the end of 2026, we believe inflation will exceed 4% yoy. We have written more about Polish inflation in our quick commentary.
• MPC-OPINION: After April’s speed-up in inflation, odds for further interest rate cuts fell significantly, as pointed out by MPC’s I. Dąbrowski.
• DEBT: The Ministry of Finance plans to hold three auctions of government securities in May: on 13 May with a supply of PLN 6–12 billion, on 21 May for PLN 7–13 billion, and on 27 May with a supply of PLN 6–12 billion. The following securities will be offered at the auctions: OK0129, NZ0331, PS0731, DS0436, NZ0936; IZ-type bonds and other series may also be included. The Ministry of Finance plans also to hold one auction in May for the sale of 46-week Treasury bills, on 8 May with a supply of PLN 3–6 billion. The Ministry of Finance does not plan to hold any bond exchange auctions in May.
• DEBT: The Armed Forces Support Fund, managed by Poland’s development bank BGK, has increased its planned proceeds from the 2026 bond issue by just under PLN 3 billion – from PLN 73.7 bn to PLN 76.6 bn. These funds will not increase the central government deficit, yet they will increase the general government deficit calculated under the EU methodology.
• DEBT: The Ministry of Finance sold treasury bonds on Tuesday with a total value of PLN 9.1 billion (including the follow-up offers) against demand of PLN 11 billion. Following the auction, the level of financing of central government borrowing requirements for this year rose to 49%.
• STATE BUDGET: The Ministry of Finance published two medium-term documents yesterday: ‘Multi-year macroeconomic assumptions for 2026–2030’ and ‘Report on the implementation of the medium-term budgetary and structural plan for 2025–2028’. The Ministry assumes that GDP growth will reach 3.6% in 2026 and will gradually slow down in subsequent years (to 3.1% in 2027 and below 3% thereafter). The Ministry anticipates a further cuts in NBP interest rates, to 3.25% eventually. The second of the aforementioned documents, in turn, contains assumptions regarding the main fiscal variables for 2026 – the Ministry of Finance assumes that the general government deficit will fall this year to 6.8% of GDP, whilst debt will rise to 65.1% of GDP.
• ECONOMIC SENTIMENT: The PMI Manufacturing Index rose slightly from 48.7 to 48.8 pts. In April.

Financial market update

Polish assets are once again demonstrating notable strength, particularly the PLN. After breaching the 4.26 level against the euro, the currency appeared poised to extend its upward movement toward 4.30; however, it reversed the course instead, with EUR/PLN once again trading below 4.25 this morning. This indicates that the pair has returned to the sideways trend observed over the past month. Polish government bond yields also increased on Thursday, in line with movements in core markets. In the coming week, the key event will be the Monetary Policy Council meeting on Wednesday, followed by the press conference of NBP President Adam Glapiński on Thursday. We expect that, despite recent hawkish remarks from some Council members, interest rates will remain unchanged, and the central bank’s communication will remain cautious. In our view, a “wait-and-see” approach will dominate the Council’s stance in the coming months. As this scenario is largely anticipated, we do not expect significant changes in Polish government bond yields this week. The PLN, having failed to break through resistance levels, should remain relatively strong.