Poland Maintains Interest Rates Amid Rising Inflation

Poland's inflation rate climbed to 4.9% year-on-year in September 2024, surpassing expectations and marking a sixth consecutive month of increases. This rise, primarily driven by higher food and energy prices, has prompted the Monetary Policy Council to maintain the benchmark interest rate at 5.75%, where it has remained since last October. The decision aligns with forecasts from economists and contrasts with rate cuts by regional peers like the Czech Republic and Hungary. The central bank aims for an inflation target of 2.5% ± 1%, necessitating a cautious approach to interest rates amidst rising inflation expectations. The Polish government's recent withdrawal of economic support measures has significantly influenced these inflation trends. Given the current economic landscape, rate cuts are unlikely until mid-next year, pending a sustained decrease in inflation.