Poland Cuts to 4.00%
National Bank of Poland MPC Cuts Key Interest Rate 25 bps Amidst Falling Inflation
Warsaw December 3rd, 2025
In a meeting held on 2–3 December 2025, the Monetary Policy Council (MPC) decided to lower the NBP reference rate by 0.25 percentage points to 4.00%. This decision reflects an economic landscape characterized by accelerating GDP growth alongside diminishing inflationary pressures.
Interest Rate Adjustments
Alongside the reduction in the reference rate, the Council set the remaining National Bank of Poland (NBP) interest rates as follows:
• Lombard rate: 4.50%
• Rediscount rate: 4.05%
• Discount rate: 4.10%
• Deposit rate: 3.50%
Domestic Economic Performance
The Polish economy demonstrated resilience in the third quarter of 2025. Annual GDP growth accelerated to 3.8%, up from 3.3% in the second quarter. This growth was primarily driven by an increase in domestic demand, specifically investment and consumption. October 2025 data further highlighted positive trends, showing annual increases in industrial output, retail sales, and construction and assembly production.
However, the labor market presented a contrasting trend. Despite the growth in output and sales, data indicates a slowdown in wage growth and a continued decrease in employment within the enterprise sector.
Inflationary Trends and Rationale
The Council’s decision to adjust interest rates was heavily influenced by favorable inflation data. According to a flash estimate by Statistics Poland, annual CPI inflation dropped to 2.4% in November 2025, down from 2.8% in October. Furthermore, estimates suggest that core inflation (excluding food and energy prices) also decreased.
Taking into account these developments and the outlook for upcoming quarters, the Council determined that a rate adjustment was justified.
Global Context and Future Outlook
Globally, economic activity in major advanced economies remained stable in Q3 2025. Inflation in the euro area is currently close to the European Central Bank’s target, while inflation in the United States remains above the Federal Reserve’s target.
Looking ahead, the MPC emphasized that future decisions will remain data-dependent. The Council identified several risk factors regarding the inflation outlook, including:
• Fiscal policy decisions
• The pace of demand recovery
• Developments in wage growth and energy prices
• External inflation pressures
The NBP remains committed to ensuring macroeconomic stability and keeping inflation consistent with its target in the medium term, retaining the option to intervene in the foreign exchange market if necessary.