Interest rate cut expected this week

Credit Agricole Bank Polski predicts that most members of the Monetary Policy Council (RPP) in Poland will reduce interest rates by 25 basis points in their upcoming meeting, citing a significant deterioration in economic growth prospects. This aligns with market consensus and is expected to have a neutral impact on financial markets.

However, there is a risk that rates may remain unchanged, leading to a stronger Polish zloty and higher bond yields. The bank maintains its inflation forecast at 6% by the end of 2023 but notes potential disinflationary trends, although energy tariff developments pose a risk. They also anticipate a return to a 5% VAT rate on food in 2024, gradually increasing CPI inflation to 4.9% by Q4 2024 due to rising food and fuel prices.

Source: 300gospodarka.pl