Poland might discuss adjusting its monetary policy before 2026 if there is clear evidence of a sustained decline in inflation toward the central bank’s target, according to Adam Glapinski, Governor of the National Bank of Poland (NBP). This represents a potential shift from Glapinski’s earlier statements, where he indicated that the Monetary Policy Council (MPC), which he leads, was unlikely to consider a rate cut before 2026 due to uncertainties surrounding inflation forecasts.
In comments made to the PAP newswire, Glapinski emphasized that the timing of any monetary policy changes will be data-dependent. The Polish zloty weakened slightly by 0.3%, trading at 4.2809 against the euro following his remarks.
While other central banks in the region, such as Hungary and the Czech Republic, have already reduced interest rates this year, Poland’s central bank has maintained its base rate at 5.75% since October. This decision comes amid rising inflation, which accelerated to 4.2% in July from 2.6% in June, following the government’s decision to raise the cap on energy prices. The central bank’s hawkish stance has contributed to tensions between Glapinski and Prime Minister Donald Tusk, who has accused him of hindering economic growth.
Glapinski highlighted that future MPC decisions would hinge on various factors, including wage growth, consumer spending, the economic health of Poland’s trading partners, and energy prices. “Depending on a combination of these factors, room for rate cuts may appear sooner or later,” Glapinski stated. “It can’t be ruled out that the economic situation will evolve in such a way that a discussion about adjusting monetary policy could be justified before 2026.”
He also noted that the risk of high inflation returning across Europe and the U.S. is gradually diminishing, increasing the likelihood of rate cuts. Despite Poland’s economy growing more than anticipated in the second quarter, Glapinski cautioned that it is “still too early to say” whether this growth trend will be sustained.
Looking ahead, Glapinski expressed concerns that consumption, which has been the primary driver of Poland’s economic growth, may weaken next year as wage growth slows. This would place greater importance on the international economic environment as a determinant of Poland’s economic trajectory.
Analysis and Market Impact
For investors and market participants, Glapinski’s comments signal a potential shift in Poland’s monetary policy outlook, which could have significant implications for the country’s economic landscape and financial markets. The possibility of earlier-than-expected rate adjustments could influence investment strategies, particularly for those with exposure to Polish assets.
The central bank’s cautious approach reflects the delicate balance between managing inflation and supporting economic growth. Investors should closely monitor incoming economic data, particularly regarding inflation, wage growth, and external economic conditions, as these will be key drivers of any future policy changes.
Poland’s economic performance relative to its peers in the region will also be crucial. While other central banks have begun to ease monetary policy, Poland’s higher interest rates have maintained a strong currency but at the cost of potential economic slowdown. A timely policy adjustment could mitigate these risks, offering a more favorable environment for growth while keeping inflation in check.
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