Research Detail
| 2023/09/07 / Erste Group Research |
Unexpected NBP cut amid slower growth prospects In the midst of the current global economic downturn, Poland is experiencing reduced growth owing to dwindling consumption demand, which has resulted in an annual GDP growth estimate of -0.6% in Q2. Considering the high frequency indicators, such as retail sales or industrial production, the state of the Polish economy seems to be more troubling than previously expected. Nevertheless, not all developments are negative in Poland. Investments, for example, have posted the fastest growth rate since the beginning of 2020, while inflation has been on a declining path since February. Net exports are also providing some support for the economy, at least for the time being. In light of these economic developments, the NBP shocked the markets with an unexpected rate cut of 75 basis points, outrunning market expectations by six months. The consequences of this decision will undoubtedly be broad, and we anticipate the inflation fight to be a more challenging task than expected, particularly next year. One of the reasons for this is the projected depreciation of the Polish Zloty towards the end of the year, which may continue if the current lax monetary policy remains unchanged. The yield curve is expected to steepen for at least a couple of months, while the growth prospects in the coming year should slightly improve. Additionally, Poland is scheduled to hold general elections on the 15th of October, and the outcome of the elections remains uncertain. The result will significantly impact the resolution of disputes with the EU and could potentially unfreeze the RRP funds. |
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General information
| Author | Erste Group Research |
| Date | 2023/09/07 |
| Language |  |
| Product name | CEE Country Macro Outlook |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Poland |
| Currency in focus | Polish Zloty |
| Sector in focus | - |
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