Economists from Bank Ochrony Środowiska forecast that by mid-2027, inflation will return to the level of the National Bank of Poland's inflation target of 2.5%. They emphasize that the key factor for the implementation of this scenario is reaching an agreement between the US and Iran, which would enable the unblocking of the Strait of Hormuz.
As indicated in the report, the current conflict in the Middle East is causing constraints on the production of raw materials in the Persian Gulf region and increasing transport congestion, which is slowing down the normalization of prices and costs.
“The second condition for limiting the increase in CPI inflation is maintaining lower excise and VAT rates on fuels. According to our estimates, in the second and third quarters they will reduce inflation by approximately 1 percentage point,” the report notes.
Risk of inflation increase related to the situation in the Middle East
Economists estimate that the risk for inflation forecasts in Poland is asymmetric, with a higher probability of an increase in the CPI index than a decrease. In the event of an escalation of the conflict in the Middle East, oil prices may rise sharply, which will result in increases in the prices of other goods and raw materials. Additionally possible the weakening of the Polish zloty would result in an increase in import costs.
According to BOŚ forecasts, the average annual CPI inflation rate in 2026 will be 3.2%, which would, however, mean a decrease compared to the level of 3.6%. in 2025
Experts remind that Even before the outbreak of the conflict in the Middle East, it was expected that inflation in 2026 would reach only 1.9%. rdr. According to them, changes resulting from the current situation may increase this indicator by 1.5-2 points. percent
Interest rates unchanged in the next year
In the base scenario, BOŚ economists assume that interest rates in Poland will remain at the current level for the next 12 months. “Taking into account our inflation scenario, i.e. maintaining CPI inflation below 3.5% in 2026 and its return to the NBP inflation target in mid-2027, we do not expect changes in interest rate policy” – wrote in the report.
Experts indicate that the decisions of the Monetary Policy Council are influenced, among others, by: decline in wage dynamics, strong zloty exchange rate and lower economic growth rate compared to previous forecasts. They emphasize, however, that if the pessimistic scenario materializes, including further increases in oil prices and their impact on inflation, monetary policy tightening is possible.
“The statements of MPC members, including the president of the NBP, indicate readiness to take action if a negative scenario materializes. Therefore, the risk of higher interest rates remains significant,” summarize BOŚ economists.
