Economic news

• GDP: Statistics Poland (GUS) revised its estimate of Poland’s GDP growth to 4.1% yoy in the second quarter of 2026 from 3.9%, and to 3.7% in the first quarter from 3.5%. We discuss these data in more detail later in the report.
• INTEREST RATES: Several MPC (the Monetary Policy Council) members have spoken out. Gabriela Masłowska and Ireneusz Dąbrowski did not rule out rate hikes at upcoming meetings. Factors that could warrant higher rates include the emergence of second-round effects, mounting wage pressures, and increases in regulated electricity and gas prices. Masłowska explicitly noted that inflation remaining above the upper limit of the tolerance band around the NBP’s target (3.5%) in the coming months, despite lower fuel prices following the introduction of the CPN package, would argue in favour of a rate hike. Przemysław Litwiniuk focused mainly on FX issues but reiterated his earlier view that the baseline scenario envisages rates remaining unchanged through the end of the year. A rate hike, he suggested, would be prompted by inflation exceeding 3.5% in mid-2027. In turn, Ludwik Kotecki said that the NBP’s November projection would determine whether rates should be raised. In our view, the projection will show inflation remaining above target for an extended period, at least until the end of 2027, prompting the MPC to raise rates.
• INFLATION: In its final release, Statistics Poland (GUS) revised September CPI inflation upwards to 4.1% yoy, from the flash estimate of 4.0%. There is something for everyone in the data: hawks will focus on the higher headline inflation rate, while doves will point to a decline in core inflation to 3.1% yoy from 3.3% in the previous month. However, the downside surprise in core inflation was driven by lower-than-expected prices for package holidays, which appears to reflect a correction following earlier increases. There are no clear signs of the energy shock spreading to broader basket of goods and services, but neither is core disinflation continuing.
• FOREIGN TRADE: August saw a further widening of the current account deficit, which reached EUR 3.6bn, compared with the expected EUR 2.5bn. On a rolling 12-month basis, we estimate that the current account deficit rose to 1.4% of GDP, while the trade deficit widened to 1.5% of GDP. Since the beginning of the year, the trade deficit has increased by 0.2pp of GDP, while the current account deficit has widened by around 0.5pp. The larger deficit is being financed by a modest increase in foreign direct investment (FDI) and portfolio investment. It is worth noting that the deterioration in the external balance has been relatively limited given the scale of the increase in energy prices, partly reflecting higher prices for some of Poland’s export commodities, such as copper and silver. Finally, August saw a further acceleration in goods export growth to 13% yoy.
• LABOUR MARKET: According to preliminary data from the Ministry of Family, Labour and Social Policy, the registered unemployment rate stood at 5.8% in September, unchanged from the previous month and in line with market expectations.
• STATE BUDGET: State budget execution was relatively weak in September. Revenue from indirect taxes fell year on year, with VAT receipts down 2% and excise duty down 4%. The reinstatement of the CPN programme for two weeks in August explains only part of the decline. CIT revenue was up 35% yoy, mainly due to the higher tax rate for banks, while PIT revenue increased by 7%. Budget expenditure was also PLN 10bn (11%) lower than a year earlier, helping to limit the September deficit. At the end of September 2026, the deficit stood at PLN 172bn, compared with more than PLN 200bn at the same point last year. The difference is largely explained by the absence this year of bond redemptions by PFR and BGK.
• DEBT: At last week’s auction, the Ministry of Finance sold POLGBs worth a total of PLN 13.4bn, including PLN 1.4bn at the supplementary auction, against demand exceeding PLN 20bn. The amount sold was at the upper end of the announced supply range of PLN 8-12bn, making the auction a success. The Ministry of Finance announced that the government’s borrowing requirements for 2026 had been fully financed following the auction.

Our third attempt at 4% Polish GDP growth

We have recently informed readers that, following stronger-than-expected monthly macro data for the second quarter from Poland and abroad, we had raised our forecast for Polish GDP growth this year from 3.5% to 3.7% (annual average). We are now taking another step and returning to our original forecast from the beginning of the year, expecting growth to reach 4.0%. This is our third attempt at this figure: we initially expected growth of 4.0% in 2025, then in our original forecast for 2026, and are now giving it another shot.

Two factors have prompted this revision:

1. Upward revisions to first-half GDP growth. Statistics Poland (GUS) revised its estimate of GDP growth in the first half of the year upwards by 0.2 percentage points. We now know that Poland’s economy grew by 3.7% yoy in the first quarter, accelerating to 4.1% in the second. The revision was driven primarily by higher estimates of public consumption (by an average of 1.2 pp) and investment (by 0.4 pp), alongside substantial revisions to both imports and exports. According to the latest data, however, neither imports nor exports recorded double-digit real growth in the second quarter. Since imports was revised downwards more sharply than exports, the contribution of net exports to GDP growth increased.
2. A more resilient third quarter. Available data for the third quarter, together with our estimates for September, suggest that GDP growth slowed only slightly during the period, to 3.8–3.9% yoy, above our previous assumptions.

GDP growth and its expenditure components in the first half of the year (% yoy)

Source: Pekao Research, Statistics Poland (GUS), Macrobond

Together, these two factors lift our forecast for average annual GDP growth to 3.9%. Whether the first digit ultimately turns out to be a 4 will depend on the fourth-quarter result. It is obviously too early to know much about that quarter, which has only just begun, but the bar for achieving 4.0% average annual growth is not particularly high. GDP growth would need to accelerate to 4.0–4.1% yoy, a result that investment could deliver in a late-year push. The final months of the year have brought plenty of positive surprises in recent years, so the chances look reasonably good.

Does this change our macroeconomic outlook? No. The impact of the revisions is spread fairly evenly across the individual GDP components:

• Government consumption has grown more strongly than we expected, despite the current fiscal constraints. Even the NBP has struggled to explain why this component of GDP has expanded so rapidly in recent quarters.
• Exports has been a positive surprise in 2026, and the data revisions reinforce that assessment.
• Private consumption is set to slow markedly in 2026, but this essentially means a return to the pattern seen in 2024, when growth stood at around 3% yoy, following a strong 2025.
• Investment remains unchanged in our forecast. We continue to expect 2026 to be a year of strong investment.

At the same time, it is worth bearing in mind that several headwinds to economic growth will emerge in 2027. These include the completion of some investment projects financed by the National Recovery Plan (KPO), the delayed impact of the oil shock on private consumption, and the initial effects of monetary tightening. This is why none of our revisions to the 2026 growth forecast has so far led to a change in our forecast for the following year.

There is, however, one positive signal worth noting: the only leading indicators currently available to us – those coming from financial markets – are still flashing green for 2027. They suggest that GDP growth in the first half of next year should continue to hover around 4% yoy.

GDP growth and forecasts based on the shape of the yield curve (% yoy)

Source: Pekao Research, LSEG, Statistics Poland (GUS), Macrobond

Financial markets update

In recent days little happened in the FX market. The coming week should be more interesting, as macroeconomic data return to the fore. Given the Monetary Policy Council's sensitivity to incoming data, some releases deserve particular attention. Within the September data batch, wage growth and producer prices will be the most important indicators in this respect. We will focus more on the real economy data, although we doubt markets will pay them much attention.

The key event, however, will be the government bond auction. The previous auction was very successful, but it benefited from coming after a three-week hiatus. This time, additional supply will hit a market that is less starved of bonds. Even so, we sense that sentiment has improved and demand for government securities should remain solid. Global market trends remain the elephant in the room, with the potential to have a significant impact on the outcome in either direction.

Review of upcoming macroeconomic figures

20 October, Industrial production September, Pekao: 3.4% yoy  Consensus: 3.1% yoy

Working day count is unfavorable, yet industrial output is projected to hold firm in September. We do not see any reason to turn negative on Polish industry. In addition, August manufacturing output was unusually low and that should lead to a major rebound in September.

20 October, Employment in the enterprise sector September, Pekao: -0.8% yoy  Consensus: -0.8% yoy

It does not appear that September has brought any breakthrough in employment figures. In this context, the situation in the labor market remains stable, and the slight rebound in the number of job postings is not strong enough to translate significantly into data on average employment.

20 October, Wages in the enterprise sector September, Pekao: 6.0% yoy  Consensus: 6.0% yoy

After substantial volatility in recent months driven by one-off factors, wage growth appears to have returned in September to a level that better reflects its underlying trend, stripped of statistical noise. We estimate that average wages accelerated to 6.0% yoy from 5.6% a month earlier.

22 October, Retail sales September, Pekao: 3.2% yoy  Consensus: 3.6% yoy

No major changes, with two exceptions. Fuel prices jumped in September as the oil shock intensified and tax relief was withdrawn. This will translate itself into one of the weakest fuel sales figures on record. We also expect clothing and footwear sales to disappoint due to warm weather.   

23 October, Unemployment rate September, Pekao: 5.8%  Consensus: 5.8%

The unemployment rate has remained at the brink of reaching the 5.9% threshold for several months. Labour market conditions remain stable, and seasonal patterns point to little change in the indicator in September. We therefore expect the unemployment rate to remain unchanged. That said, difficult-to-predict fluctuations in labour force participation, which affect the denominator of the unemployment rate, constitute a potential source of upside risk to the reading.