The Polish central bank has lowered its key interest rate again. At its meeting on March 4, the Monetary Policy Council of the National Bank of Poland (NBP) reduced the interest rate by 25 basis points to 3.75 percent.
With this move, the NBP is continuing its easing course. It had previously cut interest rates five times by 25 basis points each between July and December. After a two-month pause, the central bank is now returning to further easing measures.
In total, the NBP cut interest rates six times in 2025 by a combined 175 basis points. The reason for this was falling inflation, which is increasingly approaching the central bank's target range of 1.5 to 3.5 percent.
New data from the GUS statistics office show that the inflation rate fell to 2.2 percent in January. In December, it had still been at 2.4 percent. The central bank stated that an adjustment of interest rates was justified in view of the current inflation trend and the economic outlook.
At the same time, the NBP pointed out that wage growth in the corporate sector slowed significantly in January. This is also considered an important factor in the easing of price pressure in the Polish economy.
The decision was made despite ongoing uncertainties in the international environment. Tensions in the Middle East have recently led to rising energy prices. The price of oil rose to over $80 per barrel at times.
The central bank therefore warned of possible risks to inflation. Factors contributing to uncertainty include fiscal policy, the expected recovery in demand, and the development of commodity prices.
In parallel with its interest rate decision, the NBP published an updated macroeconomic forecast. According to this, inflation is likely to be between 1.6 and 2.9 percent in 2026. In the previous forecast, the range was between 1.9 and 4 percent. For 2027, the central bank expects an inflation rate of between 1.1 and 3.7 percent.
The NBP is also somewhat more optimistic about economic growth. For 2026, it forecasts GDP growth of between 3.1 and 4.7 percent. For 2027, it expects a growth rate of 2.0 to 3.8 percent.
According to analysts, domestic economic factors played a particularly important role in the interest rate cut. These include, in particular, lower inflation forecasts and the recent appreciation of the złoty. Bank PKO BP stated that the further development of energy prices and foreign exchange markets would be decisive for the central bank's next steps.
In the base scenario, many analysts expect a further decline in the key interest rate to around 3.5 percent. This step could already be taken in April. However, ongoing geopolitical tensions could slow down the easing process.
This article was produced in cooperation with our partner bne intelliNews.
Original article (German):
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