Poland’s central bank warns that the new EU emissions trading system for fuels and buildings (ETS2) could add around 2 percentage points to inflation in 2028, yet the official NBP projection does not include this risk. The warning comes as the Monetary Policy Council debates the timing of potential rate cuts, while the Warsaw Stock Exchange hits new records and the country’s first offshore wind farm starts feeding power into the grid.
The NBP’s latest inflation projection shows a benign path: 2.9% in 2026, 2.7% in 2027, and 2.2% in 2028. But Jacek Kotłowski, director of the NBP’s economic research department, told a press conference that introducing ETS2 in its current form could lift inflation by roughly 2 percentage points in 2028. Adding that to the projected 2.2% would put inflation close to 4.2%, well above the central bank’s target of 2.5% plus/minus 1 point.
– We estimate the direct effect at about 1.5-1.6 percentage points and the indirect effect at about 0.4-0.5 percentage points, resulting from higher energy prices – Kotłowski said, adding that the calculation assumes a CO2 permit price of 59 euros per tonne, while current market prices stand at 79 euros.
The central bank explains it has not formally included ETS2 in the baseline projection because the necessary domestic legislation has not yet been adopted. Technically this is understandable – central banks usually do not embed solutions whose precise shape is not yet final. But the lack of national law does not make the risk disappear.
Rate cut debate splits the council
Just days after NBP Governor Adam Glapiński opened the door to a possible rate cut after the summer, saying he might table a motion for a 25-basis-point reduction if the economic and inflation outlook remains unchanged, other council members pushed back. Henryk Wnorowski told BIZNES24 that he sees little chance of cuts this year, and if one does happen, it would be at most a single move, likely not in September.
– Of course we can speculate, but even in the governor’s statement there were many reservations and assumptions: if, if, if. In the perspective of September, several of those 'ifs’ may not materialise, others may appear. I think it’s a premature signal. As of today, I see enormous difficulty in supporting such a motion – Wnorowski said. Another council member, Ludwik Kotecki, also ruled out a September move, saying a cut could be considered later in the year.
For mortgage holders, the prospect of lower monthly payments is still alive, but should not be treated as a done deal.
Stock market hits record highs, but zloty weakens
The Warsaw Stock Exchange ended last week with a series of records. The WIG index breached 142,000 points, mWIG40 hit an all-time high, and WIG20 rose 2.3% on Friday to its highest level since 2007. Year-to-date, WIG and mWIG40 have gained over 21%, WIG20 over 18%. The rally was led by banks: PKO BP rose 4.8%, Pekao 3.8%, mBank 2.5%.
Oddly, the record highs coincide with a noticeable weakening of the zloty. The euro is trading near 4.34 PLN, briefly hitting 4.35 PLN on Friday – the highest since November 2024. The dollar is above 3.80 PLN for the first time since May 2025. Historically, a weaker zloty tended to accompany weaker stock market sentiment, but this time is different.
Also on Friday, Poland began drawing electricity from its first offshore wind farm. Baltic Power, owned by Orlen and Canada’s Northland Power, has installed 54 of 76 turbines, with completion expected in autumn. The farm will have 1.2 GW capacity and produce about 4 TWh annually, enough to power over 1.5 million households. It is part of a broader push to reach around 6 GW of offshore capacity by 2030.
Meanwhile, fuel prices at Polish stations are expected to rise further. BM Reflex forecasts Pb95 petrol at 6.95 PLN/litre and diesel at 7.20 PLN/litre, up 10 groszy and 21 groszy respectively week-on-week. Since the end of June, petrol has risen by over 1 PLN/litre, diesel by nearly 1.20 PLN/litre. The spike reflects global oil price increases (8.6% since late June), geopolitical tensions in the Persian Gulf, and Russia’s ban on diesel exports, which tightens global supply despite the EU embargo.
Źródło: WNP.PL, Fot. PAP/Leszek Szymański
