Poland’s inflation rate fell to 2.5% year-on-year in June, according to preliminary data, surprising many analysts who had forecast a higher reading. The decline, driven by falling fuel and food prices, strengthens the case for interest rate cuts by the Monetary Policy Council later this year.
The latest estimate from Poland’s statistical office GUS shows the consumer price index (CPI) dropped from 3.1% in May to 2.5% in June. It marks the second consecutive month where inflation undershot expectations and brings the headline figure squarely within the National Bank of Poland’s target range.
Fuel prices fell 7.4% month-on-month, aided by lower global oil prices and despite the reinstatement of higher excise duties at the start of 2026. A key surprise came from food and non-alcoholic beverages, which dropped 0.7% in June after a 1.0% decline in May – prices are now lower than a year ago, according to ING Bank economists.
Core inflation steady, but outlook shifts
Energy prices edged down 0.4% month-on-month. Core inflation, excluding food and energy, remained broadly unchanged from May at an estimated 3.0-3.1% year-on-year. The overall easing of price pressures has altered market expectations dramatically.
– Just three weeks ago, forward rate agreements (FRA) were pricing in at least three rate hikes of 25 basis points each. Now speculation is shifting towards possible rate cuts in the second half of 2026 – noted ING’s economists.
NBP in a comfortable position
The lower inflation reading puts the Monetary Policy Council in a more comfortable situation. Analysts at ING maintain their baseline scenario that the central bank’s main reference rate will stay at 3.75% for the coming months, with the next move being a cut rather than a hike.
– The war in the Middle East interrupted the adjustment cycle, but the NBP may return to easing if medium-term inflation prospects remain favourable – the economists added. The July inflation projection will provide the Council with a clearer picture of current trends and the potential room for monetary policy loosening.
For borrowers, the prospect of lower interest rates could eventually translate into cheaper mortgage installments, although the timing of any decision remains uncertain. The market will now focus on the NBP’s next meeting and the updated inflation outlook.
Źródło: WNP.PL, Fot. PAP/Radek Pietruszka
