NBP chief: discussion on rate cuts possible in March 2025

Asked if a discussion on monetary easing, specifically rate cuts, might start in March after the latest projections on inflation and GDP, Glapiński replied: "Yes, this projection may already show a somewhat optimistic picture, and by March, we’ll be in that situation. We’ll know the decisions regarding the anti-inflation shield, especially related to energy, and we’ll be able to calculate everything. So yes, definitely."

"I wouldn’t be surprised if a member of the MPC presented a proposal after the March projection," he added. "But will it secure a majority?"

Glapiński stated that the Monetary Policy Council (MPC) is prepared to immediately begin cutting interest rates once inflation stabilizes and starts to decline. He noted that if the deficit were reduced and fiscal policy tightened, it would allow for faster monetary easing and rate cuts. Glapiński also emphasized that the NBP’s policy aims to bring inflation within target by 2026.

"Inflation has once again exceeded the NBP’s target of 2.5 +/- 1 (percent - ed.), which is why we are pursuing a monetary policy aimed at bringing it back to target in the medium term—within the next two years, until 2026," Glapiński said, adding that the reference rate remains at 5.75%.

Based on NBP estimates, Glapiński warned that the public sector deficit for this year and the next may be even higher than government forecasts. He added that a significant reduction in the deficit could help ease inflationary pressures.

"If the deficit were reduced and fiscal policy were tightened, we could proceed more quickly with monetary easing and rate cuts," Glapiński highlighted.

According to the medium-term budgetary plan adopted by the government in October, Poland’s public sector deficit is expected to rise to 5.7% of GDP in 2024. However, the plan outlines a reduction in the deficit over the following years, aiming to bring it below 3% of GDP by 2028.