Economic news

• INFLATION: Polish inflation cooled (although less than anticipated) in July, with CPI easing to 3.1% yoy, above the 2.8% forecast and still firmly within the NBP’s target range. The difference in actual and predicted values is driven by stronger-than-expected energy prices, mainly linked to a mix of statistical base effects, the reinstated capacity charge and volatile fuel costs as well as a worrying uptick in core inflation, which likely rose to 3.5% yoy. While headline CPI is now within the target band, persistent core inflation and firm wage dynamics challenge the dovish bias within the MPC ahead of its September rate decision. We examined the current inflationary trends here.
• SENTIMENT: Poland’s manufacturing PMI rose to 45.9 in July from 44.8 in June, signaling a modest easing in the pace of contraction after hitting a spring low. While declines in output and new orders slowed, the overall downturn remains pronounced. Export demand weakened sharply, marking the steepest drop in nearly two years, and firms continued to scale back employment, purchasing, and inventories. Expectations for future output improved slightly but remain muted by historical standards.
• DEBT: Poland’s Finance Ministry has already secured 85% of its 2025 gross borrowing needs, with around PLN180bn in budget accounts at the end of July, compared to PLN199.4bn a month earlier. For August, the government plans a bond auction on August 6 (PLN6–12bn) and a switch auction on August 27, with no Treasury bill issuance scheduled.

The (not-so-)unlikely source of information on foreigners in Polish labour markets. 

Ukrainians now constitute the largest foreign-born population in Poland, making up 78% of all registered foreigners, according to the Office for Foreigners. Their presence in the economy is already substantial: 69% are employed, and in 2024 they were responsible for an estimated 2.7% of GDP, equivalent to nearly PLN100bn, by Deloitte’s count. But beyond these macroeconomic indicators, the social and financial contours of the Ukrainian community remain surprisingly underexplored. How do they spend? Are they settling or merely transiting? Where do they live, and how stable are their household finances?

Traditional statistics offer little help. But credit data, often overlooked in public debate, can provide a more textured picture of financial engagement. A recent report from Poland’s Credit Information Bureau (BIK) offers just that.

By mid-2025, 265,000 foreigners held loans or credit obligations totaling PLN25.7bn. Ukrainians were by far the most active, with 184,000 borrowers and a combined credit volume of PLN13.6bn. Belarusians came next (24,000 borrowers, PLN4.2bn), followed by Indians (5,000 borrowers, under PLN1bn). These figures suggest that foreign nationals are not only working in Poland but increasingly participating in its financial system.

Loan and credit portfolio of foreigners in Poland (by nationality)

Source: BIK, Pekao Research

Zooming in on Ukrainians (the largest and most economically visible group) the data reveal that 11.9% of the population holds an active loan or credit. Contrary to expectations, this is not primarily short-term or consumption-driven borrowing. Of the PLN13.7bn owed by Ukrainians, a full 78% takes the form of mortgages. That alone implies a longer-term perspective on residence. Yet scale matters: while sizeable, their PLN10.7bn in housing debt is comparable to just one month of new mortgage issuance across Poland, which reached PLN8.6bn in June.

Credit portfolio structure of Ukrainians in Poland

Source: BIK, Pekao Research

The demographic structure of these borrowers is also telling. The typical Ukrainian borrower is young: 70% are between 25 and 44 years old, compared with just 40% among Polish debtors. Younger borrowers typically face lower incomes and greater earnings volatility, which would suggest higher credit risk. Yet the opposite seems to be true. Only 0.5% of mortgage loans issued to Ukrainians are overdue by more than 90 days, compared to 3.9% for Polish borrowers, an eightfold difference.

Credit and loan portfolio quality (share of liabilities overdue by 90+ days, by nationality)

Source: BIK, Pekao Research

Some of this discrepancy may be mechanical. Many of the loans to Ukrainians are recent and therefore have not yet had the chance to fall into arrears. A mortgage issued two months ago, for instance, cannot be more than 90 days past due. Even so, the low default rate is notable, especially given the relatively youthful profile of this group.

As a lens into economic integration, credit behaviour offers more than just numbers. It suggests something harder to capture with traditional metrics: a willingness to invest, to settle, and to engage with long-term financial commitments. In short, it offers evidence not just of participation in the labour market, but of deeper roots being laid in Polish society.

Financial market update

The U.S. labor market report did make a fleeting impression on the domestic FX market, but its impact proved to be short-lived as USD/PLN remained within 3.68-3.69 range between Friday and Monday. By the end of the trading session, the EUR/PLN exchange rate had reverted to its previous level, remaining confined within a narrow trading range. Meanwhile, movements in the fixed income space closely mirrored developments in core markets, suggesting a synchronized response to global signals.

In the coming days, market participants are expected to continue digesting international drivers and assessing their implications for demand in local asset classes. However, one notable exception lies ahead: on Wednesday, the government will hold a treasury bond auction, a key event that will mark the start of a multi-week hiatus in sovereign bond supply, potentially shifting the dynamics in the domestic debt market.