The National Bank of Poland (NBP) has unveiled its latest inflation projections, shedding light on the anticipated dynamics of price increases for the coming years. According to the bank’s March inflation projection, there is a 50% probability that annual price growth in 2024 will fall within the range of 2.8% to 4.3%. The forecast for 2025 suggests inflation could be between 2.2% and 5%, with the figures for 2026 expected to lie between 1.5% and 4.3%.
These projections were disclosed following the Monetary Policy Council’s meeting, during which the Council reviewed the outcomes of the March inflation and GDP projections. The forecasts, assuming unchanged NBP interest rates and incorporating data available up to February 15, 2024, indicate a narrowing of the inflation forecast range for 2024 compared to the previous projection from November 2023, which anticipated a range of 3.2% to 6.2%.
Furthermore, the central bank provided insights into the GDP growth rate, projecting a 50% likelihood that it will range between 2.7% and 4.3% in 2024—a significant revision from the 1.9% to 3.8% range predicted in November 2023. The projections for 2025 and 2026 show expected growth rates of 3.2% to 5.3% and 2% to 4.5%, respectively.
However, the NBP cautioned that the current inflation projection carries considerable uncertainty, particularly concerning the duration and nature of food and energy price control measures. Given the assumption that these measures will continue in their current form until the end of the projection horizon, the uncertainty distribution for inflation is markedly asymmetric. For 2024, there is a 43% chance that annual price growth will exceed the 50% probability range, with only a 7% chance of it falling below.
In its final note, the bank confirmed that the Monetary Policy Council decided to maintain interest rates at their current levels, with the NBP’s main reference rate held steady at 5.75%, concluding its two-day meeting without any changes to the rates.
This projection offers a glimpse into the expected economic conditions in Poland, highlighting cautious optimism about inflation control and economic growth amidst prevailing uncertainties.