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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 38 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 38 institutional desks. No promotion.
The recent report from ING highlights Poland's ability to maintain low inflation levels even after prior energy shocks, with June's CPI coming in at 2.5% YoY. This positive outlook is driven by falling fuel and food prices, which could shape the direction of the Polish zloty moving forward. Per the full note, the prevailing geopolitical tensions in the Middle East could influence the monetary policy stance of the National Bank of Poland, adding caution to any potential rate cuts this year. Without high-impact events on the immediate horizon, traders should keep a close watch on how these dynamics interact with broader market sentiments.
The desk views Poland's recent CPI data as a sign of resilience in the face of past energy shocks, suggesting a cautious yet stable economic outlook for the country. According to ING's analysis, the decline in inflation to 2.5% YoY in June is primarily attributed to a significant monthly decrease in fuel prices by 7.4% and a slight drop in food prices, showcasing the effectiveness of domestic price adjustments despite prior external shocks.
Importantly, the core inflation, which excludes food and energy, also eased slightly from 3.1% to 3.0% YoY. This downward trend indicates that consumer prices are stabilizing, potentially influencing monetary policy decisions. The continued geopolitical tensions noted in the report could limit the National Bank of Poland's flexibility in reducing rates significantly this year.
Poland's zloty is a focal point of discussion within our macroeconomic framework, with a consensus target of 1.075 for the EUR/PLN pair. Current projections from various firms include: - jpmorgan: 1.10 target for Mar26 - bofa: 1.04 target for Mar26 The desk acknowledges that this outlook aligns closely with the prevailing market assessment, underscoring a consensus that anticipates a stable zloty in the short term.
Many firms, including jpmorgan and others, support the notion of a stabilizing zloty anchored by low inflation and robust domestic conditions. Conversely, bofa presents a more cautious approach, suggesting that external pressures could disturb current trends. For traders, movements in the EUR/PLN are expected to closely reflect shifts in the NBP's policy direction, as well as underlying regional stability.
With no significant economic events scheduled in the coming month for Poland, market participants will have to rely on external developments and ongoing geopolitical tensions to inform their trading strategies.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
Market implications
Traders should watch for potential volatility in the EUR/PLN, especially as geopolitical tensions might impact oil prices and, in turn, inflation expectations. Key levels to monitor include the 1.075 target while keeping an eye on core inflation metrics for the coming months.
Risks to this view
A resurgence in global oil prices or escalated regional conflicts could quickly alter the current inflation trajectory in Poland, necessitating a reassessment of the NBP's policy stance and leading to zloty volatility.
Articles Low June inflation highlights Poland’s resilience despite past energy shock Published 11:20 Poland Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Lower fuel and food prices brought Poland’s CPI inflation back to target in June, with little evidence of spillovers from the previous energy shock. Inflation should stay below 3% this year but renewed Middle East tensions leave little room for rate cuts and call for a cautious policy stance Rafal Benecki and Adam Antoniak Polish inflation remains low despite the previous energy shock Fuels and food push inflation down in June Statistics Poland (GUS) confirmed its preliminary estimate of June inflation at 2.5% YoY. The decline from 3.1% YoY in May was driven mainly by lower fuel prices (-7.4% MoM) and lower prices of food and non-alcoholic beverages (-0.7% MoM).
On an annual basis, fuel price inflation slowed from 12.3% YoY in May to 5.3% YoY in June, subtracting 0.4pp from the headline inflation rate. In the case of food and non-alcoholic beverages, annual price growth of 0.5% YoY recorded in May turned into a slight annual decline (-0.2%) in June, knocking off further 0.2pp from headline inflation. We estimate that core inflation excluding food and energy prices eased to 3.0% YoY in June, down from 3.1% YoY in May.
Lower food prices were supported, among other factors, by declining prices of fruit and nuts (-6.0% MoM) and vegetables (-2.4% MoM). Meat and dairy prices remained broadly unchanged month-on-month. While declines in seasonal food prices are typical during the summer months, this year they appeared earlier and have been more pronounced.
The decline in fuel prices was supported by the ceasefire between the United States and Iran in mid-June, which contributed to a fall in crude oil prices from around US$92/bbl at the end of May to US$73/bbl at the end of June. Poland's CPI inflation back to the NBP target Infaltion, %YoY, perc. points. Source: GUS, ING. "> Source: GUS, ING.
Energy shock not spilling over into other price categories The decline in core inflation suggests that the previous increase in fuel prices is not currently generating broader price pressures across other goods and services. Deflation in clothing and footwear continues both on an annual and monthly basis. Price declines were also observed in some categories closely linked to fuel costs, where increases had previously been recorded.
These included transport services (-2.0% MoM), particularly air transport (-9.1% MoM). In the "recreation and culture" category, which had previously shown some signs of impact of the energy shock and contributed positively to annual inflation, the trend has now reversed. Annual price growth in this category is moderating as the seasonal increase in package holiday prices (4.3% MoM) has been smaller than a year earlier, while deflation continues in categories covering goods related to recreation and culture.
CPI inflation to remain below 3% until end-2026 At the end of June, the government measures targeted at compressing gasoline prices (lower excise duty, lowered VAT and cap price) expired. The restoration of the VAT rate from 8% to 23% led to an increase of around PLN 0.90 per litre in petrol and diesel prices during the first days of July. As a result, July will likely bring a temporary increase in inflation.
According to our forecasts, inflation should remain within the 2.5-3.0% range through the end of the year. This does not warrant interest rate hikes, particularly given the absence of second-round effects or persistently elevated inflation expectations following the increase in fuel prices seen in March. Rates to remain unchanged in 2H26 as renewed conflict in Iran calls for caution National Bank of Poland (NBP) Governor Adam Glapiński adopted an even more dovish tone in July than the already soft stance presented in June.
The NBP's relatively accommodative stance contrasts with the moderately hawkish rhetoric of other major central banks, including the CNB, ECB and the Federal Reserve. Glapiński seemed unconcerned by the risks linked to the renewed tensions in the Middle East, but subsequent comments by the other Monetary Policy Council (MPC) members seemed to show more caution amid elevated uncertainty. Given the risk of an increase in inflation in the coming months and the persistently high uncertainty surrounding developments in the Middle East, we see no room for interest rate cuts this year.
Our baseline scenario continues to assume that NBP interest rates will remain unchanged throughout this year. We also do not believe that there is currently a majority within the MPC to support the post-summer interest rate cut advocated by Glapiński. NBP rates CPI inflation Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Rafal Benecki Chief Economist, Poland Rafal Benecki is a Chief Economist at ING in Poland, joining in 2005. Prior to this, he was the head of the Economic Analysis Bureau at Millennium Bank in Warsaw.
He has an MSc in Financial… Adam Antoniak Senior Economist Adam has about 20 years of experience in macroeconomic research. He has worked for leading financial institutions in Poland (Bank Pekao, Bank BPH), and members of international financial groups… In this article Fuels and food push inflation down in June Energy shock not spilling over into other price categories CPI inflation to remain below 3% until end-2026 Rates to remain unchanged in 2H26 as renewed conflict in Iran calls for caution
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