ING economists Rafal Benecki and Adam Antoniak anticipate that the National Bank of Poland (NBP) will maintain its current interest rate of 3.75% at the upcoming meeting on 9 July and keep rates unchanged through the end of the year [1]. They rule out the possibility of rate hikes and consider rate cuts unlikely in the near term, citing the need for greater confidence in the inflation outlook before resuming any easing cycle [1].
The economists note that inflation returned to the NBP's 2.5% target in June, supporting the central bank's wait-and-see stance [1]. While market expectations shifted from pricing in more than three rate hikes at the beginning of June to anticipating potential rate cuts later in the year, ING's view remains that rates will stay flat, even projecting unchanged rates until the end of 2026 as they expect CPI to remain slightly above the 2.5% year-on-year target for the rest of 2024 [1].
The easing cycle in Poland was previously interrupted by turmoil in the Persian Gulf, and policymakers are expected to require several months of favorable inflation data to be convinced that the economy is not experiencing delayed inflation effects from energy or supply chain shocks, particularly regarding core CPI [1]. The July macroeconomic projection is anticipated to present a favorable medium-term inflation outlook, but ING believes the Monetary Policy Council will maintain its cautious approach for now [1].
CONCLUSION
The National Bank of Poland is expected to keep interest rates unchanged at 3.75% in the near term, with both hikes and cuts seen as unlikely. Market expectations have shifted, but ING economists maintain a steady outlook, emphasizing the need for sustained favorable inflation data before any policy changes.