Poland Macro Weekly: Waiting for Godot

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TOP MACRO THEME(S):

• Waiting for Godot - we present a summary of updated quarterly forecasts, with a slight downward revision to the growth outlook. We stick to our interest rate path assuming a return to rate cuts in the spring, though we highlight the risk that monetary policy may remain frozen throughout 2025.

WHAT ELSE CAUGHT OUR EYE:

• Industrial production and construction output in November proved stronger than our forecast but rather weak overall. The first one decreased by 1.5% y/y (with contraction in 18 out of 34 sectors), the latter one by 9.3% y/y amid unfavorable calendar effects. PPI deflation declined to 3.7% y/y from 5.2% y/y. Retail sales surprised on a positive note, increasing by 3.1% y/y in November, boosted by car sales (effect of tighter emission standards from 2025).
• The average nominal wage in the enterprise sector increased in November by 10.5% y/y, slightly faster than expected, while the fall in employment equaled 0.5% y/y being dragged down by manufacturing.
• Core inflation in November increased to 4.3% y/y from 4.1% y/y in October.
• Consumers assessed the current situation more positively in December than in November, although still relatively low. The current consumer confidence index increased to -16.7 pts. from -17.1 pts. Higher assessments of the ability to make important purchases and of the current economic situation outweighed a slight deterioration in assessments of the financial situation of households.
• Investment of companies (>50 employees) fell by 8.1% y/y in 3q25. A pullback in investment spending was observed across all type of enterprises, with the deepest one among public companies (due to low EU fund absorption).
• The central budget deficit increased to PLN 142 bn by November, compared to the revised annual target of PLN 240bn following the budget amendment.

THE WEEK AHEAD:

• On the home stretch before Christmas Eve data on registered unemployment rate and M3 aggregate for November will be published (both on Monday).

NUMBER OF THE WEEK:

• 1000 tons – the amount of butter that Government Strategic Reserves Agency plans to sell to stabilize situation on this market.