NBP Predicts Potential Interest Rate Cuts in 2026

Adam Glapiński, President of the National Bank of Poland (NBP) and Chairman of the Monetary Policy Council (MPC) announced that the earliest possibility for reducing interest rates might be in 2026. During a press conference following the MPC’s decision to maintain the main reference rate at 5.75% for the ninth consecutive time, Glapiński highlighted key economic indicators and future projections.

He noted that inflation in June aligned with the NBP’s target for the fifth consecutive month, recording a rate of 2.6%. Despite this positive trend, Glapiński emphasized the need for future-oriented decisions to stabilize inflation.

Forecasts suggest inflation will rise in the second half of 2024 due to increasing energy prices, independent of NBP’s monetary policy. Consumer prices are expected to rise by approximately 1.6% in July 2024 and another 1.3% in January 2025. By the end of 2024, inflation could reach 5%, influenced by changes in energy costs and reinstated capacity fees.

Glapiński indicated that maintaining current interest rates is crucial for inflation to stabilize at the target level by 2026. He dismissed the possibility of reducing rates amidst rising inflation, suggesting that such measures could be considered only when inflation declines in 2026. The MPC’s next meeting is scheduled for early September.