Makroekonomia

While the NBP left interest rates unchanged as expected, favorable inflation data prompted a downward revision to its forecast and a surprising dovish shift in the MPC stance, which makes our scenario of a cut in July certain, while a cut in May would not surprise us.

Housing prices in Poland stabilized in 4q24, with weak demand, record-high unsold inventory, and a sharp drop in transactions. Prices are expected to remain stable in 2025, with a risk of moderate declines, in (an unlikely) scenario of the NBP not cutting interest rates by year-end. Central banks in both Czechia and Hungary decided to keep interest rates unchanged and presented a hawkish stance. Next week will bring PMI indexes for the CEE. In the middle of the week the NBP will decide on the interest rates, however, due to relatively short time that passed since the last decision and accompanying projection, we do not expect a major change in stance.

Set of monthly data from Poland for February align with our long-standing view that developments on the labour market should support disinflation this year, justifying rate cuts. Monetary policy will be in the spotlight next week. CNB will decide on interest rates on Wednesday, and we expect no change in the Czech monetary policy parameters. While a cut in Czechia cannot be entirely ruled out, any change in rates seems out of the question in Hungary.

At first glance it seemed like the latest NBP inflation projection could significantly postpone the discussion on interest rate cuts. However, we view the details of the projection and its assumptions as making our previous judgments still valid. In addition, February inflation surprised on a positive note.

The recent strong appreciation of the zloty, while contributing to a moderate decline in inflation, has also had a negative impact on GDP. Scenarios of further currency appreciation show lasting decline in prices at the expense of GDP, whereas a return to a weaker zloty would gradually reverse these effects, mitigating the negative economic consequences in the long run.