S&P Global Ratings forecasts that inflation in Poland will fall from 11.7% in 2023 from 13.3% in 2022 (against the NBP’s inflation target of 2.5% +/-1%), to 6.2% in 2024 and to 3.1% in 2025, the agency said. In its view, the MPC will start to cut interest rates at the end of this year. For 2026, the agency forecasts inflation in Poland at 3.0%.
We expect inflation in Poland to reach the central bank’s target range of 1.5%-3.5% no earlier than in 2025, it said.
The Polish zloty strengthened earlier this year, and given expectations that inflation is likely to fall sharply this year, the Polish central bank will start cutting interest rates towards the end of 2023, it stated.
According to the agency, Poland’s main interest rate in 2023 will be. 6.5 per cent (vs. 6.75 per cent in 2022), 5.25 per cent in 2024, 3.5 per cent in 2025 and up to 3.0 per cent in 2026.
S&P Global Ratings also pointed out that slowing inflation and decelerating growth are reducing pressure on emerging market central banks to raise interest rates, but that the Fed’s guidance on interest rate policy points to further tightening in the future.
Given the expected disinflation, several central banks have signalled the end of interest rate hikes, including Brazil, Chile, Poland and Hungary. As the Fed continues to raise interest rates, the greater risk of capital outflows from emerging markets should be factored in, it stated.
Source: S&P Global Ratings and ISBnews
