By Euronews
Published on
Poland’s central bank cut borrowing costs on Wednesday, lowering its benchmark rate by 25 basis points to 4.75%, matching forecasts.
This came after inflation eased to 2.8% in August, marking the lowest level since summer 2024. The total is also dramatically lower than the peak of over 18% seen in 2023.
“Economic growth is solid, but the economy is not overheating and generating additional inflationary pressure,” said ING economists Adam Antoniak, Rafal Benecki and Mateusz Sutowicz, in a note on Monday.
“Wage growth slowed to 7.6% year-on-year in July. Signals from the government and the president suggest a willingness to extend the freeze on household electricity prices into the fourth quarter of 2025,” they said.
Another rate cut is likely in November, the experts concluded, although moderate inflationary risks remain.
The public sector deficit for this year has been revised up to 6.9% of GDP, from a previous 6.3%. In 2026, the budget creates a projected deficit of 6.5%, notably as Poland plans to spend more on defence.
“We have war beyond our border and we want to conduct an ambitious investment plan,” Finance Minister Andrzej Domanski said last week. “Curbing the deficit is key, but let’s remember the situation that Poland is in.”
Poland’s president Karol Nawrocki will meet US President Donald Trump in Washington on Wednesday. The new leader is set to make the case that the United States needs to maintain its robust military presence in his country in the face of Russian aggression.
