National Bank of Poland brings An unexpected relief for millions of Poles! The NBP Vice President, Marta Kightley, announced groundbreaking forecasts: consumer inflation could fall to around three percent already in July 2025. This is the lowest reading of this key economical indicator in over a year and means the return of price dynamics to the advanced limit of the inflation mark of the central bank. After years of conflict with the systematic increase in the cost of surviving and the erosion of purchasing power, this information is simply a ray of hope. Does that mean the eventual end of the price? Unfortunately, NBP experts inform against 1 key hazard origin that can turn our portfolios upside down again.
Inflation goes faster than expected. Key NBP figures
Data provided by the National Bank of Poland clearly indicate a dynamic downward trend in inflationwhich since the beginning of 2025 has been decreasing at a rate exceeding the expectations of most analysts. In the first 4th of this year, consumer price dynamics amounted to 4.9% on an yearly basis, which proved to be importantly lower than expected. Moreover, in June this indicator had already fallen to 4.1%, demonstrating a consistent disinflation trajectory that is encouraging.
A systematic decline is peculiarly crucial core inflation. This indicator, which excludes variable food and energy prices, better reflects basic price trends in the economy. In May, the base inflation was only 3.3%, reaching the lowest level since the COVID-19 pandemic, i.e. since early 2020. This is proof of the effectiveness of the restrictive monetary policy conducted by the central bank and the gradual expiry of inflationary pressures in the Polish economy. Vice-President Kightley stressed that according to the latest forecasts, inflation should scope a level close to 3% in July 2025, which means returning to the advanced limit of the NBP inflation mark scope (2.5% plus minus 1 percent point).
Hope for interest rate cuts? NBP reduces emotions
Such affirmative inflation forecasts naturally rise questions about the future interest rates. The stabilisation of price dynamics at levels consistent with the NBP nonsubjective in the average word can aid reconstruct consumer and business assurance in the Polish economy. Consequently, this will enable the normalisation of monetary policy to begin by gradually decreasing interest rates in the next quarters, which would be a relief to borrowers and an incentive for investment.
However, the central bank remains cautious in its declarations and at the same time warns against potential hazard factors. The most crucial of these are future decisions concerning administered electricity prices. They are presently frozen at artificially low levels within the government's energy shield system. Vice president Kightley made it clear that inflation could increase again in subsequent quarters if the government decided to defrost these prices. This is likely given the expanding budgetary costs of the strategy and the force on the European Commission. It is this key decision of the government that will find whether the breath of relief of Poles will be prolonged, or whether we will have another wave of increases.
What does that mean for your wallet? Perspectives for Poles
The fall in inflation to levels close to the central bank's mark is broad consequences for each of us. First of all, the reconstruction process may begin purchasing power of wages and pensionswhich have been systematically weakened in fresh years. Consumers can be relieved of the regular costs of purchases, peculiarly in terms of goods and services not subject to price regulation. little spending on basic products means more money in your pocket for another needs.
The banking and financial sectors will besides benefit from inflation stabilisation, which can open the way to Recovery in the credit market. Lower interest rates can peculiarly positively affect housing marketwhere the advanced cost of mortgage loans drastically reduced the availability of housing for young Poles. Businesses will gain greater price stability, facilitating planning and investment, and the labour marketplace may experience reduced wage force and greater predictability. Even the pension strategy will have affirmative effects, reducing the erosion of savings.
When will inflation return to its destination? Final Forecast and Risks
Despite current optimistic trends, the NBP is improving moods, indicating that the continued return of consumer inflation to the central bank's main nonsubjective (2.5 %) will not happen until the first 4th of 2026. This means that for another year or so the Polish economy will gotta cope with increased inflation, exceeding the long-term goal of the NBP. This timetable highlights the central bank's cautious approach and designation that the disinflation process is more complex and time-consuming than originally envisaged.
The central bank stresses that the balance of uncertainty factors for future inflation dynamics remains close to symmetrical, which means that the probability of upward and downward inflation deviations is similar. This assessment indicates greater forecast stableness than in erstwhile periods erstwhile hazard factors leading to higher inflation prevailed. However, the key origin of strategical importance remains Future regulatory action on energy prices. The decision to defrost these prices will have a direct impact on the trajectory of inflation in subsequent quarters and on the timing of possible interest rate reductions. Success in maintaining inflation at low levels will require thoughtful coordination of monetary and fiscal policies, as well as skillful management of the phase-out of emergency energy cover. This task, which stands before the government and the NBP, will decide how rapidly and permanently we will breathe with relief.
Continued here:
No more expensive? NBP: Inflation 3% already in July! But the government has a key decision.
