The year 2025 promises to be unique, challenging, groundbreaking, emotional, and… unpredictable. With political shifts, armed conflicts, and mounting tensions, what lies ahead for financial markets? Which global economic events will prove pivotal? And how will these impact inflation, interest rates in Poland, and ultimately, our wallets?
All Eyes on the U.S.
On January 20th, Donald Trump will formally assume the presidency of the United States. Even before taking office, his statements and plans continue to surprise—or even shock. His decisions and promises are expected to set the tone for the global economy and politics.
“The undeniable star of the next 12 months will be the new-old U.S. President, Donald Trump, who, as early as December, showed no intention of sharing the spotlight. It’s likely to be a tough period for globalization, with protectionist movements gaining strength not only in the U.S.,” says Krzysztof Adamczak, currency analyst at InternetowyKantor.pl and Walutomat.pl.
However, Trump’s unpredictability makes it challenging to forecast future developments in global politics.
“Donald Trump has accustomed us to unexpected moves. A single message on a popular communication platform can upend the status quo,” comments Krzysztof Pawlak, another currency analyst at InternetowyKantor.pl and Walutomat.pl.
Trump’s promises include potential developments that could be crucial for Poland and its region.
“I hope Trump keeps his word and ends the ongoing war in Ukraine. This would be an opportunity for Poland, which could play a significant role in Ukraine’s reconstruction,” says Pawlak.
A Year of Tensions
The Middle East and Ukraine are two regions drawing particular concern and hope, fueled in part by Trump’s promises.
“A key event could be the freezing of the war instigated by Russia in Ukraine. This would likely result in the lifting of many sanctions and a broader flow of Russian exports. Putin needs substantial funds for his budget, even if oil prices drop. This could mark the end of OPEC+ and herald a new era for the oil market, with the U.S. as the leading producer,” notes Adam Fuchs, an analyst at InternetowyKantor.pl and Walutomat.pl.
Regarding the Middle East, the situation remains precarious.
“Recent events surrounding Israel indicate that the region is at its most unstable in decades. It’s hard to believe the situation will calm down in the coming months. However, if no major conflict erupts, a potential drop in oil prices could be pivotal for the global economy. While I’m skeptical about Trump’s promise of $40 per barrel, absent a catastrophic war, all indicators point toward declining oil prices, which would be ideal for the global economy,” adds Adamczak.
Inflation in Poland: Forecasts for 2025
Adamczak predicts: “According to NBP projections, average annual inflation in 2025 is expected to exceed 5%, and I find this plausible. However, I don’t share Professor Glapiński’s concerns about another surge in price dynamics by the end of the year. Prolonged monetary tightening should finally influence inflation readings. While 2025 will likely end above target, the following year should stabilize around 2.5%.”
Fuchs adds: “If Trump delivers on his promise of $40 oil, inflationary pressure will diminish. In this scenario, even lifting energy subsidies in Poland might not trigger a price surge. By the end of 2025, inflation could return to NBP’s acceptable range of 3.5%.”
Pawlak also weighs in: “I anticipate inflation will exceed 4% by year-end. Factors contributing to this could include Trump’s proposed tariffs, including those affecting Europe, and domestic pressures such as the phasing out of energy price shields.”
Interest Rates: What’s Next?
Experts suggest that Poland’s Monetary Policy Council (RPP) may delay rate cuts, leaving borrowers waiting for relief.
“While a few rate cuts might make economic sense, they don’t align with the rhetoric of the central bank chief. I believe we may begin easing monetary policy by late 2025, but I expect only one or two reductions,” Adamczak comments.
Pawlak concurs: “If we take President Glapiński at his word, discussions about rate cuts in Poland won’t begin until autumn. If Poland’s economic situation doesn’t worsen suddenly, the RPP may maintain high rates throughout 2025.”
Is the Zloty an Attractive Option for Investors?
The Polish currency may face challenges early in the year.
“The first half of the year will be tough for PLN, particularly due to the market’s pro-dollar stance, which heavily burdens the zloty. On the other hand, the RPP’s reluctance to cut rates in early 2025 could support the currency. When the Council finally acts, its timing may coincide with the Fed’s moves, creating opposing pressures,” Fuchs explains.
“Monetary policy could be a decisive factor bolstering the zloty’s appeal. By year-end, I expect the EUR/PLN rate to hover around 4.35, slightly higher than in 2024. The prospect of rate cuts could weigh on the zloty, but a strong economy should provide a solid foundation, keeping PLN attractive for investors,” concludes Pawlak.
The Year Ahead: A Wild Ride
With political shifts, elections in Poland and the EU, rising support for radical parties, and escalating conflicts, 2025 promises to be an unpredictable and fascinating year. While forecasts for global and local markets vary widely, the unexpected remains a distinct possibility. The financial markets are far from dull, and this year is bound to deliver plenty of drama.
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Source: ManagerPlus.pl