Poland’s central bank has decided to maintain its benchmark interest rate at 5.75%. This decision comes despite economic pressures impacting inflation. The central bank remains cautious, concerned about potential inflation increases. Expiring energy price caps and a strengthening US dollar contribute to these concerns.
Inflation Outlook and Economic Projections for 2025
The National Bank of Poland’s decision follows December 2024’s year-on-year inflation rate of 4.7%. This figure remained consistent with November’s data. The central bank is hesitant to reduce rates due to the risk of escalating inflation.
In December, key price categories showed mixed trends. Non-alcoholic beverages and food costs held steady at 4.8%. Transport costs declined at a slower pace. Price increases for tobacco and alcoholic drinks moderated slightly. However, utilities and housing costs rose more rapidly, fueling inflationary pressures. Health costs also saw a slight uptick.
Despite these challenges, Poland’s economy is projected to grow in 2025. The European Commission forecasts a 3.6% GDP increase. Private consumption and investment drive this growth. However, inflation is expected to rise to 4.7%, a significant jump from 2024’s 3.8%. The unemployment rate is projected to remain low, at 2.8% for 2025.
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