Market Confident in Rate Cuts: Business Insider Barometer
- Financial analysts are closely watching for potential interest rate adjustments, with varied expectations on timing and magnitude. The consensus points towards the third quarter for the first rate...
- The prevailing view among financial institutions is that "the first cut will be as much as 0.5 percentage points." However, some analysts diverge from this expectation.
- Despite arguments that "interest rates are too high," possibly strengthening the złoty unnaturally,there's uncertainty whether the Monetary Policy Council (RPP) will align with this viewpoint.
Interest Rate Cuts Expected: A Detailed Analysis
Table of Contents
- Interest Rate Cuts Expected: A Detailed Analysis
- Economic Outlook: Wage Growth and GDP Forecasts
- Polish Economic Outlook: CPI Forecast and Rate Cut Expectations
- Poland’s Economic Forecast: Interest Rates, Inflation, Wages, and GDP in 2025-2026
- Interest Rate Outlook
- When is the anticipated timeline for the first interest rate cut in Poland?
- How significant will the initial interest rate cut be?
- What is the projected interest rate by the end of the year?
- How will interest rate cuts impact loan installments?
- What factors could influence the RPP’s decision on interest rates?
- Inflation forecasts
- Wage Growth
- GDP Outlook
- Interest Rate Outlook
Financial analysts are closely watching for potential interest rate adjustments, with varied expectations on timing and magnitude. The consensus points towards the third quarter for the first rate cut, specifically July or September, considering august is typically a “non-decision” meeting. No one anticipates any changes before July, meaning borrowers with variable interest rates should temper their hopes until then.
Timing of the First Interest Rate Cut
- mBank: Predicts the first cut in the fourth quarter.
- Majority of Analysts: Expect the first cut in the third quarter (July or September).
Magnitude of the Initial Cut
The prevailing view among financial institutions is that “the first cut will be as much as 0.5 percentage points.” However, some analysts diverge from this expectation.
- Pekao and Credit Agricole: Foresee a smaller cut of 0.25 percentage points.
Despite arguments that “interest rates are too high,” possibly strengthening the złoty unnaturally,there’s uncertainty whether the Monetary Policy Council (RPP) will align with this viewpoint.
Year-End Interest Rate Projections
By the end of the year, the expectation is that “interest rates should be 1 percentage point lower than currently,” settling at 4.75%. This projection is shared by analysts at Millennium, Pekao, ING BSK, and goldman Sachs.
According to Jarosław Sadowski from Rankomat.pl, a loan of 400,000 zł taken in January 2021 for 30 years could see its installment decrease “from 2908 zł to 2660 zł, i.e. by 248 zł per month.”
Divergent Views on Rate Cuts
Some analysts, like those at mBank and Credit Agricole, are more conservative, suggesting the main rate will only decrease “to 5.25%,” based on communications from the NBP president.
Inflation Forecasts and Their Impact
The projections are occurring amidst “higher than in January inflation forecasts for 2025,” which could reduce the likelihood of rate cuts. Economists at PKO BP raised their average annual inflation estimate for 2025 “from 4.1 to 4.4%,” while Citi Bank Handlowy increased theirs “from 4.1 to 4.5%.” Conversely, ING BSK lowered their forecast “from 4.5 to 4.2%.”
quarterly Inflation predictions
The median from quarterly forecasts (based on five domestic banks) indicates a decline in inflation throughout the year:
| Quarter | inflation Rate |
|---|---|
| Q1 | 5.3% |
| Q2 | 4.9% |
| Q3 | 3.7% |
| Q4 | 3.6% |
These projections suggest that the RPP, according to analysts, will likely consider these inflation trends when making decisions about interest rates.
Economic Outlook: Wage Growth and GDP Forecasts
Wage Increases Expected
Employees can anticipate positive news. Economists are forecasting a nominal wage increase of 8.4% year-over-year, according to the median of six available projections.
Considering the projected inflation rate of 4.4%, this translates to a real wage increase (above inflation) of 3.8% in 2025.The following year is expected to see a 3.4% increase (nominal growth of 6.5% with 3% inflation).
increased hiring is not expected to drive these wage increases, as employment is projected to remain stable year-over-year. Some analysts even predict a slight decrease. However, due to an aging population and retirements, the registered unemployment rate is anticipated to fall to 4.9%, and further to 4.8% in 2026. This labor shortage in the market is expected to be the primary driver of wage growth, along with increases in the minimum wage.
Relatively Positive Economic Outlook
recent data has not significantly altered the economic outlook. the median of collected forecasts indicates a GDP growth of 3.5% year-over-year, with no revisions from financial institutions compared to previous estimates.
However,there have been some adjustments from financial institutions. One institution lowered its estimate of the country’s growth from 3.5 to 3.4 percent. Another institution previously projected 3.8 percent, but now forecasts only 3.4 percent.
The 3.5% average growth rate is still favorable compared to other European countries, largely due to the implementation of investments. After 2026, this component will no longer be available, and it remains uncertain how much added value will be generated by the projects in which these funds are invested, such as railways, defense, or offshore wind farms.
Polish Economic Outlook: CPI Forecast and Rate Cut Expectations
Analysis of Poland’s economic forecasts, including CPI, GDP growth, and interest rate expectations for 2025 and 2026.
Revised CPI Forecast Raises Questions About Rate Cuts
Recent economic forecasts have stirred debate among analysts, particularly concerning the timing of potential interest rate cuts. The central bank’s updated CPI forecast, especially for 2026, has prompted re-evaluations of monetary policy expectations.
Analysts at mBank commented on social media platform X, stating, “2026 is quite surprising…This, combined with the reading of the statement, suggests that the moment of the rate cut is not getting any closer.”
Detailed Economic Projections for Poland
the projections indicate a CPI increase of 3.6 percent in 2026. This figure is a key indicator influencing discussions around monetary policy and potential adjustments to interest rates.
Key Factors Driving Economic Growth
Investments from the national Recovery Plan (KPO) are expected to significantly drive economic growth. Additionally, private consumption is projected to increase, although forecasts vary. PKO BP economists estimate a 4.4 percent increase,while Credit Agricole projects a more conservative 2.2 percent.
Industrial production is anticipated to grow by 4.7 percent year-on-year. This represents a significant improvement compared to the 0.3 percent growth observed in the past two years.PKO PB has revised its 2025 industry growth forecast from 2.6 to 3.7 percent, while Pekao has lowered its forecast from 7.9 to 5.6 percent.
Export Growth and the Polish Złoty
Exports are projected to increase by 4.8 percent in constant prices this year, a notable improvement from the 1.2 percent growth in the previous year.In nominal terms, exports even fell by 6.3 percent in the previous year.
Regarding the Polish złoty, forecasts suggest a weakening to 4 zł per dollar by the end of the year. ING BSK analysts predict a rate of 4.17 zł, while Bank Pekao is more optimistic, forecasting 3.79 zł, suggesting a slight strengthening of the złoty.The majority of economists anticipate a weakening, attributed to the expected decrease in interest rates.
Interest Rate Dynamics and Capital Flows
The attractiveness of Polish złoty bonds to international capital depends on the relative interest rate cuts by other central banks. Economists at Pekao believe that Polish rates will fall slower than those in the US or the Eurozone,while ING economists hold the opposite view. These differing expectations may also reflect varying perspectives on import/export dynamics.
Poland’s Economic Forecast: Interest Rates, Inflation, Wages, and GDP in 2025-2026
This article provides a detailed overview of Poland’s projected economic landscape for 2025 and 2026, covering interest rate cuts, inflation forecasts, wage growth, and GDP expectations.
Interest Rate Outlook
When is the anticipated timeline for the first interest rate cut in Poland?
Most analysts expect the first interest rate cut in Poland to occur in the third quarter of the year, specifically in July or September. No changes are anticipated before July. mBank predicts the first cut in the fourth quarter.
How significant will the initial interest rate cut be?
The prevailing expectation among financial institutions is that the first cut will be approximately 0.5 percentage points. However, Pekao and Credit Agricole foresee a smaller cut of 0.25 percentage points.
What is the projected interest rate by the end of the year?
The consensus among analysts at Millennium,Pekao,ING BSK,and Goldman Sachs is that interest rates will be 1 percentage point lower than current levels, settling at 4.75% by the end of the year.
How will interest rate cuts impact loan installments?
According to Jarosław Sadowski from Rankomat.pl, a loan of 400,000 zł taken in January 2021 for 30 years could see its installment decrease “from 2908 zł to 2660 zł, i.e. by 248 zł per month.”
What factors could influence the RPP’s decision on interest rates?
Analysts suggest the Monetary policy Council (RPP) will likely consider inflation trends when making decisions about interest rates. Higher-than-anticipated inflation could reduce the likelihood of rate cuts.
Table: Quarterly Inflation Rate Projections
| Quarter | Inflation Rate |
| —- | —- |
| Q1 | 5.3% |
| Q2 | 4.9% |
| Q3 | 3.7% |
| Q4 | 3.6% |
Inflation forecasts
How have inflation forecasts for 2025 been adjusted?
Several institutions have adjusted their inflation forecasts for 2025:
PKO BP raised their average annual inflation estimate from 4.1% to 4.4%.
Citi Bank Handlowy increased theirs from 4.1% to 4.5%.
* ING BSK lowered their forecast from 4.5% to 4.2%.
What is the projected CPI increase for 2026?
The projections indicate a CPI increase of 3.6 percent in 2026.
Wage Growth
What is the anticipated nominal wage increase for employees?
Economists are forecasting a nominal wage increase of 8.4% year-over-year.
What is the anticipated real wage increase in 2025?
Considering the projected inflation rate, this translates to a real wage increase (above inflation) of 3.8% in 2025. The following year is expected to see a 3.4% increase (nominal growth of 6.5% wiht 3% inflation).
What are the key drivers for wage growth?
The primary driver of wage growth is expected to be a labor shortage in the market, along with increases in the minimum wage. This is due to an aging population and retirements,which are anticipated to lower the unemployment rate to 4.9% in 2025,and 4.8% in 2026.
GDP Outlook
What is the projected GDP growth for Poland?
The median of collected forecasts indicates a GDP growth of 3.5% year-over-year.
what factors are driving economic growth?
Investments from the national Recovery Plan (KPO) are expected to significantly drive economic growth. Additionally, private consumption is projected to increase. Industrial production is anticipated to grow by 4.7 percent year-on-year.
What are the projections for export growth?
Exports are projected to increase by 4.8 percent in constant prices this year, a notable betterment from 1.2 percent in the previous year.
What is the expected exchange rate for the Polish Złoty against the US dollar?
Forecasts suggest a weakening of the złoty to 4 zł per dollar by the end of the year.ING BSK analysts predict a rate of 4.17 zł, while bank Pekao is more optimistic, forecasting 3.79 zł, suggesting a slight strengthening of the złoty.