2025-10-16 06:00
publication
2025-10-16 06:00
Although the interest rate cut surprised most analysts, it is directly related to much better NBP forecasts regarding inflation in the last months of 2025. According to current projections, in the following months of 2025, CPI inflation will remain within the inflation target (+/- 1 pp.) and will not exceed 3% in any month.
The Monetary Policy Council decided to further reduce the reference rate by 0.25 basis points. from 4.75% to 4.50%.
This was the fourth interest rate cut this year and the third in a row after consecutive MPC decision-making meetings. Previous rate cuts this year were 50 basis points in May, 25 basis points in July and 25 basis points in September. This means that this year the total value of interest rate cuts was 125 basis points.
September consumer inflation remained below 3% for the second month in a row – the Central Statistical Office confirmed on Wednesday.
Compared to the previous projections (from September 2025), at the October NBP Press Conference, the NBP showed significantly better projections in terms of CPI inflation. Inflation projections for the last three months of 2025 have been adjusted by as much as (on average) 0.67 percentage points. down for each month.
In the situation of such a significant correction of the inflation path, the reduction of interest rates was a natural consequence. Nevertheless, it should be remembered that the current policy mix consists of a rather loose fiscal policy (which results in historically high levels of budget deficit and public debt). Consequently, monetary policy should at least to some extent balance this situation while maintaining its restrictiveness at an adequate level.
More analyzes by the ZBP Research and Analysis Team on the macroeconomic situation, including economic growth and inflation forecasts, are available at www.pabwib.pl.
