Poland’s inflation rate came in lower than initially expected, offering some relief to both consumers and policymakers. In February, the annual inflation rate stood at 4.9%, the same as in January.
This figure marks a notable revision from the preliminary estimate of 5.3% published earlier by Statistics Poland (GUS). The revision comes as part of an annual update to the inflation basket, which adjusts for shifts in consumer spending patterns.
Each year, the basket is recalibrated based on the latest data on household expenditure, reflecting changes in consumer habits. The latest adjustments have given greater weight to car purchases, computers, video games, sports equipment and audiovisual devices, while slightly reducing the influence of food prices—though food remains the largest single component of the basket. Electricity and gas bills have also seen a slight decrease in weighting, despite remaining significant contributors to inflation trends.
On the same day as the inflation revision, Poland’s National Bank (NBP) published its latest inflation forecast. In anticipation of the report, NBP Governor Adam Glapiński stated that the projections did not justify a cut in interest rates. The central bank now expects inflation to remain largely unchanged throughout 2025, with the rate forecast to reach 4.8% in the final quarter of the year.
This outlook contrasts with the more optimistic assessments from commercial banks, which believe inflation could fall below 3.5% by the end of the year. These forecasts take into account government assurances that planned energy price hikes will not materialize, with authorities pledging to maintain price controls if necessary. The central bank, however, remains skeptical and continues to factor in the possibility of energy price increases.
Looking further ahead, the NBP projects that inflation will decline to 2.5% by late 2026 and could even fall below this level in the second half of 2027. If these forecasts prove accurate, Poland could return to its official inflation target range within the next two years—potentially opening the door for deeper interest rate cuts in the future.
Each year, the basket is recalibrated based on the latest data on household expenditure, reflecting changes in consumer habits. The latest adjustments have given greater weight to car purchases, computers, video games, sports equipment and audiovisual devices, while slightly reducing the influence of food prices—though food remains the largest single component of the basket. Electricity and gas bills have also seen a slight decrease in weighting, despite remaining significant contributors to inflation trends.
On the same day as the inflation revision, Poland’s National Bank (NBP) published its latest inflation forecast. In anticipation of the report, NBP Governor Adam Glapiński stated that the projections did not justify a cut in interest rates. The central bank now expects inflation to remain largely unchanged throughout 2025, with the rate forecast to reach 4.8% in the final quarter of the year.
This outlook contrasts with the more optimistic assessments from commercial banks, which believe inflation could fall below 3.5% by the end of the year. These forecasts take into account government assurances that planned energy price hikes will not materialize, with authorities pledging to maintain price controls if necessary. The central bank, however, remains skeptical and continues to factor in the possibility of energy price increases.
Looking further ahead, the NBP projects that inflation will decline to 2.5% by late 2026 and could even fall below this level in the second half of 2027. If these forecasts prove accurate, Poland could return to its official inflation target range within the next two years—potentially opening the door for deeper interest rate cuts in the future.
Fitch sees persistent budget deficit in Poland
The Fitch Ratings agency has warned that Poland’s budget deficit is set to remain elevated in the coming years, citing high military spending and slow fiscal consolidation. The agency estimates that Poland’s public deficit reached 6.2% of GDP in 2024 and will only gradually decline, falling to 5% by 2026. Meanwhile, public debt is projected to stabilize at 64% of GDP by 2028—almost three percentage points higher than the Polish government’s forecast.
Despite these concerns, Fitch has maintained Poland’s credit rating at “A-” with a stable outlook, citing the country’s strong and diversified economy, balanced trade relations and solid tax revenue base.
Fitch expects Poland’s economic growth to reach 3.1% in both 2025 and 2026, slightly lower than the previous projections of 3.4% and 3.2%, respectively. However, it also believes that Poland’s monetary policy will provide additional support to the economy.
The agency forecasts that the NBP will begin cutting interest rates in the second half of 2025, with six 25-basis point reductions anticipated—two in 2025 and four in 2026. This means that Poland’s benchmark interest rate could fall from 5.75% today to 5.25% by year-end and further to 4.25% in 2026.
Fitch also outlined potential triggers for a credit rating upgrade, including a substantial reduction in public debt, an acceleration in GDP growth, or significant improvements in governance and policy-making. However, the agency noted that frequent policy disagreements within Poland’s governing coalition could complicate decision-making and slow down key reforms.
Despite these concerns, Fitch has maintained Poland’s credit rating at “A-” with a stable outlook, citing the country’s strong and diversified economy, balanced trade relations and solid tax revenue base.
Fitch expects Poland’s economic growth to reach 3.1% in both 2025 and 2026, slightly lower than the previous projections of 3.4% and 3.2%, respectively. However, it also believes that Poland’s monetary policy will provide additional support to the economy.
The agency forecasts that the NBP will begin cutting interest rates in the second half of 2025, with six 25-basis point reductions anticipated—two in 2025 and four in 2026. This means that Poland’s benchmark interest rate could fall from 5.75% today to 5.25% by year-end and further to 4.25% in 2026.
Fitch also outlined potential triggers for a credit rating upgrade, including a substantial reduction in public debt, an acceleration in GDP growth, or significant improvements in governance and policy-making. However, the agency noted that frequent policy disagreements within Poland’s governing coalition could complicate decision-making and slow down key reforms.
U.S.-EU trade war escalates as new tariffs take effect
A full-scale trade war has erupted between the United States and the European Union, as Washington’s new 25% tariffs on imported steel and aluminum officially came into force. The measures apply globally, but the EU is among the most affected regions.
According to the American Iron and Steel Institute, the EU is the third-largest supplier of steel to the U.S., after Canada and Brazil. The biggest European exporters include Germany, the Netherlands and Romania. Similarly, for aluminum, the EU ranks third globally, with Greece, Germany and Austria accounting for the bulk of shipments.
In response, European Commission President Ursula von der Leyen announced retaliatory measures, stating that the EU will impose counter-tariffs worth €26 billion, covering key U.S. exports such as poultry, beef, nuts and sugar. A final list of affected products will be confirmed following a two-week consultation period with EU member states, and the new tariffs will take effect on April 1, with full implementation by April 13.
A particularly contentious issue is the EU’s planned tariffs on American whiskey, which prompted an immediate response from President Trump. In retaliation, the White House has threatened to impose a 200% tariff on French wines, escalating tensions further.
President Trump has also signaled additional tariff measures, due to be announced on April 2, which aim to “equalize” trade imbalances. These could include tariffs on imported cars, a move that would have major implications for the German and wider European automotive industry.
For Poland, the direct impact of the tariffs is expected to be moderate, according to Finance Minister Andrzej Domański. However, he emphasized the need for diplomatic efforts to prevent further escalation, warning that additional trade restrictions would be detrimental to Poland’s economic interests.
According to the American Iron and Steel Institute, the EU is the third-largest supplier of steel to the U.S., after Canada and Brazil. The biggest European exporters include Germany, the Netherlands and Romania. Similarly, for aluminum, the EU ranks third globally, with Greece, Germany and Austria accounting for the bulk of shipments.
In response, European Commission President Ursula von der Leyen announced retaliatory measures, stating that the EU will impose counter-tariffs worth €26 billion, covering key U.S. exports such as poultry, beef, nuts and sugar. A final list of affected products will be confirmed following a two-week consultation period with EU member states, and the new tariffs will take effect on April 1, with full implementation by April 13.
A particularly contentious issue is the EU’s planned tariffs on American whiskey, which prompted an immediate response from President Trump. In retaliation, the White House has threatened to impose a 200% tariff on French wines, escalating tensions further.
President Trump has also signaled additional tariff measures, due to be announced on April 2, which aim to “equalize” trade imbalances. These could include tariffs on imported cars, a move that would have major implications for the German and wider European automotive industry.
For Poland, the direct impact of the tariffs is expected to be moderate, according to Finance Minister Andrzej Domański. However, he emphasized the need for diplomatic efforts to prevent further escalation, warning that additional trade restrictions would be detrimental to Poland’s economic interests.
Poland’s labor market shows signs of weakening
The latest labor market reports paint a mixed picture of Poland’s employment landscape, with rising unemployment, fewer job vacancies and slowing wage growth. The Labor Ministry reported that the number of registered unemployed rose by 10,400 in February, bringing the total to 848,000—nearly 3,000 more than a year ago. As a result, the national unemployment rate increased from 5.4% to 5.5%.
At the same time, the number of job vacancies declined, with employers registering 79,300 new job openings at public employment offices in February. This represents a drop of 9,300 compared to January and a sharp decline of 17,500 compared to February 2024. These figures indicate that employers are becoming more cautious about hiring, likely reflecting concerns about economic uncertainty and slowing business activity.
The picture looks slightly different in the private recruitment sector. Data from Grant Thornton shows that 255,700 job advertisements were posted on recruitment websites in February, 7% fewer than in January but 9% more than a year earlier. The most significant growth in job listings was observed in the medical sector, where demand for employees surged by 23% year-on-year. Similarly, the number of job postings for manual labor roles increased by 11%. In contrast, demand for professionals in IT, law, finance, and human resources declined by several percentage points, suggesting a slowdown in traditionally high-skilled and white-collar job markets.
Looking ahead, employers remain cautious about expanding their workforce. According to research by Manpower, 33% of companies plan to increase hiring in the second quarter of 2025, while 18% expect to cut jobs. This net positive hiring sentiment is the strongest in five quarters, suggesting a gradual improvement in employer confidence.
However, wage growth is likely to slow further, posing challenges for employees seeking pay increases. The latest “Polish Labor Market Barometer,” conducted by Personnel Service, reveals that only 24% of employers plan to raise salaries this year, a significant drop from 43% in 2024. In contrast, 14% of companies intend to lower wages—double the 7% recorded last year. Meanwhile, the majority, 47% of businesses, plan to keep wages unchanged, signaling a more conservative approach to compensation amid rising costs and economic uncertainty.
At the same time, the number of job vacancies declined, with employers registering 79,300 new job openings at public employment offices in February. This represents a drop of 9,300 compared to January and a sharp decline of 17,500 compared to February 2024. These figures indicate that employers are becoming more cautious about hiring, likely reflecting concerns about economic uncertainty and slowing business activity.
The picture looks slightly different in the private recruitment sector. Data from Grant Thornton shows that 255,700 job advertisements were posted on recruitment websites in February, 7% fewer than in January but 9% more than a year earlier. The most significant growth in job listings was observed in the medical sector, where demand for employees surged by 23% year-on-year. Similarly, the number of job postings for manual labor roles increased by 11%. In contrast, demand for professionals in IT, law, finance, and human resources declined by several percentage points, suggesting a slowdown in traditionally high-skilled and white-collar job markets.
Looking ahead, employers remain cautious about expanding their workforce. According to research by Manpower, 33% of companies plan to increase hiring in the second quarter of 2025, while 18% expect to cut jobs. This net positive hiring sentiment is the strongest in five quarters, suggesting a gradual improvement in employer confidence.
However, wage growth is likely to slow further, posing challenges for employees seeking pay increases. The latest “Polish Labor Market Barometer,” conducted by Personnel Service, reveals that only 24% of employers plan to raise salaries this year, a significant drop from 43% in 2024. In contrast, 14% of companies intend to lower wages—double the 7% recorded last year. Meanwhile, the majority, 47% of businesses, plan to keep wages unchanged, signaling a more conservative approach to compensation amid rising costs and economic uncertainty.
More In Business MORE...
