After adjusting interest rates by 100 basis points at the next two meetings, the Monetary Policy Council may refrain from further moves, economists from Bank Pekao believe. The MPC may wait for the conviction that inflationary pressure is permanently decreasing to strengthen. A permanent decline of CPI to the target may not occur before the first half of 2026.
“Internal inflationary pressure in Poland is not in a downward trend, remaining at a constant, elevated level in recent months. Achieving the inflation target permanently is still a long way off and will not happen before the first half of 2026,” Pekao wrote in its report.
“Therefore, we see a considerable probability that after adjusting rates by 100 basis points at the next two meetings, the MPC will not have to continue the cuts cycle right away. The Council may wait until it becomes more convinced that inflationary pressure is permanently declining,” it added.
Economists emphasize that the impact of trade wars on inflation will be significant.
“Here we see downside risks (in the short and medium term) and upside risks (in the long term),” they say.
The next meeting of the Monetary Policy Council is scheduled for May 6-7. (PAP Biznes)
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