On December 3, the Monetary Policy Council reduced interest rates for the fifth time in a row despite repeated assurances that we are not dealing with a cycle of cuts. Economists expect that the “non-cycle” may accompany us also next year. What will Prof. say about the December rate cut and Poland's current economic situation? Adam Glapiński? We invite you to watch the report from the speech of the President of the National Bank of Poland.
The fifth consecutive and sixth reduction in interest rates this year, which took place during the December meeting of the Monetary Policy Council, was in line with economists' expectations. The market consensus assumed a cut of 25 bp. and this is the cut he received. Pursuant to the decision of the Monetary Policy Council of December 3, 2025, the interest rates of the National Bank of Poland are as follows:
- reference rate 4.25% per annum;
- lombard rate 4.75% per annum;
- deposit rate 3.75% per annum;
- rediscount rate of bills of exchange 4.30% per annum;
- bill of exchange discount rate 4.35% per annum.
As a result of the series of interest rate cuts that took place this year, which the Monetary Policy Council and the President of the National Bank of Poland consistently called “adjustment” and avoided the word “cycle”, the total scale of monetary policy loosening in Poland amounted to 175 basis points since the beginning of the year. “It is therefore quite a dynamic cycle of reductions, and not any 'adjustment' of interest rates announced by the Council,” said Krzysztof Kolany, chief analyst of Bankier.pl.
The market estimates that in 2026 the reference rate will come down to close to 3.50%, which would mean two more 25-point cuts. However, there are economists who expect further easing by up to 100 basis points in 2026.
Perhaps the public speech of the President of the NBP, Adam Glapiński, scheduled for… 15:00 December 4.
Glapiński: Othe monetary policy adopted was a success
At the beginning of the conference, President Glapiński described that there was a solemn atmosphere during the last MPC meeting. Almost the entire Council agreed that the adopted monetary policy was a success.
In further words, Prof. Adam Glapiński returned to criticism of the central bank and opinions that indicated that it was making mistakes. “Today, no one has any doubts that we have chosen the right path and brought inflation to the target,” said the president of the NBP.
“This treatment was painful, like after any serious illness. Today, inflation is 2.4%, slightly below the NBP target of 2.5%,” emphasized President Glapiński, adding that core inflation also dropped – from approximately 12% in 2023 to 3%.
“Let me remind you that we managed to come down from double-digit inflation while maintaining high economic growth and low unemployment. This is a huge success of the NBP and Poland,” says President Glapiński. “Polish GDP today is 17% higher than before the pandemic,” said the head of the NBP. And Germany has been in stagnation for the fourth year, Glapiński pointed out.
Glapiński: ZWe have managed to significantly reduce inflation
At the December meeting, the Monetary Policy Council decided to cut it by 25 basis points. Let me remind you that in total this year, although it was not a cycle, it was a decision made each time based on current data, we made a reduction of 175 bps. This easing was possible because we managed to significantly reduce inflation, emphasized President Glapiński.
Inflation in November fell slightly more than expected and amounted to 2.4%. Forecasts indicate that inflation will remain within the NBP target also in the following years – the president of the NBP explained the reasons for the decision.
However, this dynamics may increase slightly within a year according to the NBP projection. However, this projection assumes maintaining current electricity tariffs. The dynamics of core prices dropped below 3% and is the lowest in 6 years. The decreasing dynamics of service prices contributes to this. At the same time, we see that non-food market goods are getting cheaper – said prof. Glapiński.
The situation on the labor market is also important for inflation processes. Here we can see the decreasing dynamics of wage growth – the lowest readings in almost 5 years – added the president of the NBP. We are not resting on our laurels, there are still factors that may increase inflation. What are the threats: the dynamics of service prices, although they have decreased, are still high. The spending of EU funds may also have an impact on price dynamics, Glapiński continued.
President of the National Bank of Poland: a high fiscal deficit remains a threat
Prof. Adam Glapiński also emphasizes that the high fiscal deficit remains a threat, which in his opinion reduces the space for easing monetary policy and means that we need to act cautiously and more conservatively.
It should be remembered that there are many external, unpredictable factors that may increase inflation – points out prof. Glapiński.
What's next? We will continue to act cautiously, making decisions based on ongoing assessment of the situation and data. We are not in any cycle, we observe and act. Poles can be proud of our fight against inflation and the actions of the National Bank of Poland – this institution works in an exemplary manner – said President Glapiński.
Ladies and Gentlemen, we are here today at a specific point in the year and calendar, so I wish you a peaceful family Christmas. Let's be happy that we have inflation on target. Let us be glad that we managed to overcome this inflation hydra and that there are good prospects when it comes to inflation – concluded the President of the NBP.
JM/MM
