The Monetary Policy Council (RPP) continued its series of interest rate cuts on Wednesday, December 3, deciding on the sixth reduction this year—this time by 25 basis points, lowering the reference rate to 4%. Analysts at PZU expect the Council to deliver two more cuts next year, each also amounting to 25 basis points.
Since the beginning of the year, the cost of money has already fallen by 1.75 percentage points, marking a clear easing of monetary policy after a period of significant tightening. The reason? As in the previous month, the key argument is inflation. Price growth is falling faster than forecast (according to the flash estimate from Statistics Poland, CPI reached 2.4% y/y in November), and the Council believes the outlook for the coming quarters remains stable. However, the RPP stresses in its statement that risks remain—among them: loose fiscal policy, a possible rebound in domestic demand, wage and energy dynamics, and global inflationary trends.
During the press conference, NBP President Adam Glapiński confirmed that the decline in inflation was the direct reason for the latest cut. He pointed to positive signs for maintaining low inflation—slowing wage growth, weaker employment dynamics, and declining core inflation—but also warned that fiscal policy and an expected rise in demand linked to the absorption of EU funds could increase inflationary pressures. In the Q&A segment, he said the RPP is entering a “wait and see” phase to evaluate the effects of the cuts already implemented. In his view, further reductions are possible, though not abrupt. He added that the current rate level is appropriate for the state of the economy, but he does not rule out that the Council might eventually lower rates to 3.75–3.5%.
PZU’s forecasts indicate that the RPP will cut rates twice more next year, by 25 basis points each. The most likely timing aligns with periods when updated inflation projections are released. At the same time, analysts expect a temporary, slight increase in annual CPI in the coming months relative to November, which casts doubt on the possibility of a cut in the first quarter of the new year. Nonetheless, given the expected inflation path, they assume that by November 2026, the reference rate will fall to 3.5%. A more aggressive easing cycle would require inflation in 2026 to drop clearly below the midpoint of the target (2.5% y/y)—a scenario they currently do not expect.
Source: https://ceo.com.pl/szosta-obnizka-stop-co-dalej-rynek-nie-jest-pewny-kolejnych-ruchow-rpp-88136
