Inflation fell to 2.4% in November. from 2.8 percent in October. This caused such a large reduction in a key indicator for the economy a bit of a shock among economists. Their forecasts were around 2.6%. — this was the consensus of forecasts collected by PAP — and such underestimation in the case of inflation is rare.
Recently, the situation when forecasts were higher by at least 0.2 percentage points. from real data happened in May, when economists estimated price growth at 4.3 percent, but it turned out to be 4.1 percent. However, now we operate on lower values, so such underestimation is more important.
“Price pressure is subsiding not only on energy and food prices, but also on core inflation. December's cut [stóp procentowych]which we expected, will probably become a consensus in the current conditions. Both indicators, i.e. CPI and core, in the fourth quarter will be lower than the latest NBP projection,” says Rafał Benecki, chief economist at ING BSK.
“However, not everything looks so good. Poland is not fully benefiting from this drop in inflation. None of the 25 clients we met in London this week shared our view that Poland would maintain its status as a Goldilocks economy [gospodarka Złotowłosej, czyli “ani za gorąco, ani za zimno, w sam raz”] in 2026. This is a huge unused opportunity, but also a communication failure for the country, which must finance further record borrowing needs in 2026. This is a huge unused opportunity,” says Benecki.
“Food prices are positively surprising for another month in a rowclearly differing from seasonal patterns, which seems to confirm once again that this year's good harvest and oversupply of food products inhibit price increases on the market,” says Monika Kurtek, chief economist at Bank Pocztowy.
A very strong argument for the MPC
“The CPI reading in November this year will be lower than expected again a very strong argument for the Monetary Policy Council to cut interest rates again at the next (December) meeting. Inflation converged to the middle of the NBP target much faster than expectedand in the entire fourth quarter it will reach 2.5%. y/y, which is much below the forecast from the last NBP projection, which indicates 2.8%. rdr,” argues Kurtek.
“I therefore expect a cut in interest rates next week by another 25bps, followed by a break of several months and resumption of reductions in March 2026,” the economist predicts.
“Large room for interest rate cuts,” say mBank analysts, estimating that core inflation is around 2.6 percent.
There was no shock for the MPC
“It is worth noting that the decline in inflation should not constitute a shock for the Monetary Policy Council. At a press conference in November, the President of the National Bank of Poland, Adam Glapiński, emphasized that achieving the 2.5% inflation target is possible before the end of 2025. In a broader horizon, the prospects for monetary policy do not raise any major controversy. The base scenario for investors and a significant part of the Monetary Policy Council is to make two or three more cuts of 25 bp by the end of the first quarter of 2026 and then move to stabilization of rates,” Bartosz Sawicki, an Exante analyst, counters the forecasts of banking economists.
“Historically, changes in the cost of money in December were made only in exceptional circumstances. The last time was in 2021, when price pressure was starting to intensify and the cycle of price increases was just beginning. Nevertheless, the quick achievement of the NBP inflation target is an argument for the Monetary Policy Council to follow suit and reduced the reference rate from 4.25 to 4.0 percent,” the analyst expects.
“In addition to disinflation, the cooling of the labor market argues for continued easing. Wages, which were growing at a double-digit rate a year ago, in October recorded the lowest dynamics since the first quarter of 2021, 6.6% yoy,” points out Bartosz Sawicki.
