Poland’s August economic data were weaker than expected. Industrial output slowed, retail sales fell short of forecasts and wage growth eased to 5.6% year on year, while inflation accelerated to 3.4%. Economists at mBank do not see this as the start of a sudden downturn, however. In their view, a more pronounced slowdown may emerge closer to the beginning of 2027.
The latest batch of releases brought several negative surprises. In its 24 September analysis, mBank noted that industrial production, wages and retail sales undershot market consensus by more than one percentage point. Inflation surprised in the opposite direction, largely because fuel prices rose more strongly than expected.
Industry slows, but investment may provide support
Industrial production increased by 4.3% year on year in August, down from 4.8% a month earlier. Manufacturing grew by 3.4%. The strongest gains were concentrated in electrical equipment and machinery, while output of durable consumer goods fell by 7% year on year.
Industrial production – year-on-year growth
July 2026: 4.8% | August: 4.3% | mBank September forecast: around 3.5% | October forecast: around 1%
Source: mBank, “September: the economy temporarily below forecasts”, 24 September 2026.
mBank expects production growth to remain near 3.5% in September and fall towards 1% in October because of calendar effects. That would not necessarily signal a collapse in industry. Investment and rising defence expenditure are expected to provide support in the fourth quarter, with calendar-adjusted production growth potentially staying close to 5%.
Infrastructure strengthens while building construction weakens
Construction and assembly output rebounded from a 2.3% decline to growth of 6.7% year on year. Infrastructure was the main driver, with mBank pointing to the increasingly visible impact of EU-funded investment. Building construction remained weak, and the bank suspects the deterioration is more closely linked to non-residential projects than housing.
Selected August 2026 indicators
Industrial production: +4.3% y/y
Construction: +6.7% y/y
Retail sales: +3.8% y/y
Corporate-sector wages: +5.6% y/y
Source: mBank based on Statistics Poland data.
Consumers are still spending, but real wages face pressure
Retail sales rose by 3.8% year on year in August after 3.9% in July, compared with a market forecast of 5%. The differences between categories were substantial. Car sales increased by 11.7% and consumer electronics and household appliances by 10.6%, while food sales grew by only 1% and clothing and footwear sales fell by almost 3%.
mBank does not yet expect a sudden deterioration in consumption. Household sentiment and declared purchasing plans remain relatively solid, which could keep consumer spending growth near 3%. The bigger issue is weakening real wage growth if inflation continues to accelerate, with the impact likely to become more visible from early 2027.
Wage growth slows to 5.6%
Wages were among the biggest disappointments. Annual growth fell from 6.8% to 5.6%, roughly one percentage point below consensus. Part of the move reflected sharp changes in smaller sectors such as mining and forestry, but weaker wage growth was also visible in manufacturing, transport and construction.
mBank expects wage growth to stabilise in a 5.5–6% range in the coming months. Pay is still rising fastest in IT and professional services, at more than 7% year on year. Around 30% of companies say they plan pay rises, with no clear trend in that share since the start of the year.
Inflation is rising again
Inflation increased from 3.0% to 3.4% year on year in August, mainly because of fuel. Core inflation rose from 3.1% to 3.3%, although mBank says much of the increase can be traced to recreational services. The National Bank of Poland’s 15% trimmed mean remained at 2.8%, pointing to more stable price pressure across the rest of the basket.
Energy is now the main risk. Citing European Commission energy data, mBank noted that fuel prices rose by 15.4% in the first two weeks of September. The bank expects the next inflation reading could exceed 4%. If oil prices remain high and no shielding measures are introduced, inflation above 5% in early 2027 is possible under its scenario.
Polish central bank may wait out the inflation increase
The Monetary Policy Council left interest rates unchanged in September. mBank points to a shift in the tone of NBP governor Adam Glapiński, who had previously signalled the possibility of another rate cut after the summer. Higher energy prices following renewed Middle East tensions have changed the backdrop for monetary policy.
mBank continues to forecast unchanged rates until mid-2027. Inflation staying above target could nevertheless produce more hawkish communication and increase the risk of rate rises. Much will depend not on domestic demand but on global oil and energy prices.
A weaker month, with the larger slowdown still ahead
The picture is therefore mixed. August data disappointed, but infrastructure investment is accelerating, consumption is still growing and parts of industry could benefit in the fourth quarter from capital-goods production and defence spending. In mBank’s assessment, the current weakness does not yet show the full scale of the slowdown that may come later.
The key variable for the next few months is inflation. If energy remains expensive, households will face weaker real income growth and companies higher costs. That mechanism could make slower economic growth much more visible at the beginning of next year.
Source: mBank Economic Research, 24 September 2026; data and forecasts based on, among others, Statistics Poland, NBP and European Commission data.
