Poland cuts 0.25
Polish Central Bank Cuts Key Rate Amid Favorable Domestic Trends and Easing Inflation
Warsaw, 5 November 2025 – The Monetary Policy Council (RPP) convened on November 4–5, 2025, and announced a decision to cut the NBP reference rate by 0.25 percentage points, setting it at 4.25%. This adjustment was deemed justified by the Council, taking into account the recent decline in inflation and an improved inflation outlook for the coming quarters.
The Council simultaneously established the remaining NBP interest rates: the lombard rate at 4.75%, the deposit rate at 3.75%, the rediscount rate at 4.30%, and the discount rate at 4.35%.
Domestic Economic Conditions Show Resilience
Incoming data suggests that Poland is experiencing ongoing favourable economic conditions. Specifically, September 2025 witnessed annual increases in retail sales, industrial output, and construction and assembly production.
However, the labor market exhibits mixed signals. While quarterly data from the enterprise sector points to a gradual slowdown in wage growth, there has also been a further fall in employment when measured in annual terms.
Inflation Declines, Projection Ranges Narrow
According to the Statistics Poland flash estimate, annual CPI inflation saw a slight decline in October 2025, dropping to 2.8% (compared to 2.9% in September 2025). This moderation in headline inflation was largely driven by lower annual growth of food prices. Estimates also suggest that inflation net of food and energy prices decreased, although services price growth remains elevated.
The Council reviewed the results of the November projection of inflation and GDP, derived from the NECMOD model. This projection, based on the assumption of unchanged NBP interest rates, indicates a narrowing of probability ranges compared to the July 2025 projections:
Projection (50% Probability Range)
Annual Price Growth
2025 3.6 – 3.7%
2026 1.9 – 4.0%
2027 1.1 – 4.1%
Annual GDP Growth
2025 3.1 – 3.8%
2026 2.7 – 4.6%
2027 1.5 – 3.7%
Global Headwinds and Outlook
The broader global economic environment shows signs of slowing. Preliminary flash estimates indicate that the annual GDP growth in the euro area declined to 1.3% in Q3 2025. Similarly, GDP growth in the United States likely slowed down in Q3 in annual terms.
Regarding international inflation:
• Inflation in the euro area is close to the European Central Bank target, though core inflation remains somewhat higher.
• Inflation in the United States is running above the Federal Reserve’s target, amidst elevated core inflation.
• The overall outlook for global activity and inflation is subject to uncertainty, partly related to changes in trade policies.
Future Risks and Commitments
The Council indicated that its further monetary policy decisions will be contingent upon incoming information regarding inflation and economic activity prospects.
Several domestic and international factors pose risks to achieving low inflation:
• Fiscal policy.
• Recovery of demand in the economy.
• Elevated wage growth.
• The level of energy prices.
• Inflation developments abroad.
The NBP affirmed its commitment to taking all necessary actions to ensure macroeconomic and financial stability, focusing above all on keeping inflation consistent with the NBP inflation target in the medium term. The NBP also retains the option to intervene in the foreign exchange market.