Urgent NBP message for Poles. Stagflation is coming, and this is only the beginning

The Polish economy was on the brink of a new, possibly devastating crisis. The latest forecasts published by the National Bank of Poland (NBP) dispel all hopes of a fast return to stability. alternatively of the expected inhibition, we are facing a sharp acceleration in price increases that can scope levels that have not been seen in years. NBP experts are beating the alarm, informing that in 2025 inflation can again become the biggest threat to Polish portfolios, the stableness of companies and the value of our savings. The figures are clear: in the most pessimistic, but real scenario, inflation can scope 6.6% in the first 4th of next year. This means that the price will not only stay with us, but will strike with double force, putting the financial safety of millions of households and the future of the Polish economy in question. We have a period of belt tightening and hard decisions ahead of us, and ignoring these signals can prove highly costly.

Inflation's getting out of control. 2 NBP scenarios, no are optimistic

The National Bank of Poland presented in its latest study 2 paths of improvement of the inflation situation, but no of them are optimistic. Both options presume that Poles must prepare for further, severe price increases. The difference lies only in the scale and duration of the problem, and government decisions on energy prices are a key factor.

The first scenario, assuming the full release of energy and gas prices since July 2024, is simply a black script for consumers. In specified a variant, NBP predicts that Consumer inflation (CPI) in the first 4th of 2025 can fire up to 6.6%. This would mean a return to price dynamics, which inactive late spent a dream with Poles. Worse still, advanced inflation of above 5% would proceed until the end of 2026.

The second, somewhat milder scenario, is based on the presumption that the government will decide to keep the shield mechanisms and partially frost the prices of energy carriers. There's no peace in this version. NBP forecast indicates inflation increase to 5.6% in the first 4th of 2025. It's inactive almost twice as much as the previous, more optimistic analysis. In practice, this means that even with the support of the state, the purchasing power of our money will drop rapidly.

The dream of inexpensive loans is over. The RPP will frost interest rates for long months

Forecasts of galloping inflation are straight and painfully translated into the credit market. For hundreds of thousands of Poles paying off mortgage loans and for those who are planning to buy real estate, there are very hard times. The Monetary Policy Council (Money Policy Council), in the face of specified strong inflationary pressure, will have no choice but to keep interest rates at the current advanced level.

Currently the main mention rate of NBP is 5.75% and everything indicates that it will stay unchanged for many consecutive months, possibly even until the end of 2025. Any effort to reduce feet prematurely could only add oil to the inflationary fire, driving the price spiral. For borrowers, this means 1 thing: the end of the hope of a fast decline in instalments. The advanced WIBOR will remain, and the monthly burden of household budgets will not decrease.

Moreover, advanced interest rates drastically reduce creditworthiness. Banks, erstwhile assessing the financial capacity of possible customers, must take into account advanced money costs. As a result, less and less families will be able to borrow a mortgage for the dream apartment. This in turn drives request in the rental market, leading to a fast increase in rents and deepening the housing crisis in Poland.

Stagflation knocks on the door of Poland. What does this mean for the economy and the labour market?

In its analyses, the National Bank of Poland draws attention to 1 more, possibly the most dangerous macroeconomic phenomenon – stagflation. It's a toxic combination. high inflation and economical stagnation, i.e. zero or very low GDP growth. This is simply a script that economists around the planet fear due to the fact that it is simply a trap that is highly hard to get out of.

The slowing signals are already visible. Polish exports, over the years the driving force of the economy, are beginning to decline due to the poorer situation in our main trading partners, especially in Germany. Companies hold off ambitious investment plans, fearing uncertain futures and advanced backing costs. The labour marketplace sees the first signs of a frost in recruitment, and any sectors are already talking about the request to reduce employment.

For an average citizen, stagflation means a double blow. On the 1 hand, prices in stores are rising at an alarming rate and, on the another hand, occupation insecurity and force to frost wages are increasing. In specified a situation, real incomes of Poles are falling, and the purchasing power of the wage is decreasing. The government faces an highly hard task of balancing between fighting inflation and stimulating growth, which is almost impossible to accomplish without painful compromises.

Poles tighten their belts. How does the crisis change our purchasing habits and regular life?

Increasing prices and economical uncertainty force Poles to profoundly revise their budgets and habits. More and more families quit goods and services that have been standard until recently. We reduce spending on entertainment, catering and more costly products, focusing on gathering basic needs. This trend is perfectly visible in sales data.

The biggest beneficiaries of the crisis are discount stores and second-hand platforms. Poles massively shift to cheaper own brands and hunt for promotions. At the same time, the popularity of the sharing economy increases – alternatively of buying fresh tools, we like to rent them. alternatively of fresh clothing, we are looking for opportunities on Vinted or OLX platforms. It's a rational consequence to the shrinking contents of the wallets.

The crisis besides has serious social consequences. The fall in real wages leads to increased tension and frustration. Trade unions are already announcing a wave of protests and demanding increases to compensate for inflation. The situation of tiny and medium-sized entrepreneurs, who are struggling with rising energy costs, wage force and falling orders, is peculiarly difficult. Experts inform that a wave of company bankruptcy is comingwhich could straight endanger thousands of jobs.

Your savings and retirement are at risk. How to defend money from inflation?

High inflation is simply a silent thief who systematically steals from our savings. Money held on low-interest bank deposits or in cash loses value with each month. At 6% inflation, PLN 10,000 a year is truly worth just PLN 9 400. The problem concerns not only current savings, but besides funds raised for retirement under IKE, IKZE or even in ZUS.

The real value of our future benefits is melting, which puts financial safety at hazard for old age. Current pensioners already gotta number all penny, and the future cannot be delusional – they will most likely gotta work much longer to guarantee a decent life.

In this situation, the National Bank of Poland calls for consideration and raising financial awareness. This is not the time to panic, but to act consciously and thoughtfully. Experts advise that:

• Diversify savings: Don't keep all the resources in 1 place. It is worth considering investments in assets that historically well protected against inflation.
• Consider Treasury bonds: Especially those indexed by inflation, which guarantee that our savings do not lose value.
• Create and control the home budget: The conscious management of expenditure and the search for savings are the basis for the endurance of the crisis.
• Invest in yourself: Raising professional qualifications can increase our opportunities in the labour marketplace and supply higher income in the future.

We have hard years ahead that will require us all to be financially disciplined and strategically reasoning about the future. Only in this way can we minimize the negative effects of the coming crisis.