4:52 20 November 2025
Poland’s inflation puzzle
Poland’s core inflation has dipped below the eurozone’s for the first time since early 2019—despite Poland being one of the EU’s fastest-growing economies. The contrast is striking: strong domestic demand, high nominal wage growth, a wide budget deficit, and very low unemployment would normally point to higher inflation, not lower.
Eurostat data show Poland’s core inflation at 2.3% in October versus 2.4% in the eurozone. The gap is small and may partly reflect statistical noise, but the speed of Poland’s disinflation has surprised most analysts. As recently as last year, the European Commission projected Poland would have among the highest core inflation rates in the EU. Instead, it now sits mid-pack—and below the eurozone average—while growth remains broadly on forecast.
Economists disagree on the cause. PKO BP’s Piotr Bujak attributes it to strong productivity gains that are slowing unit labor-cost growth and bolstering competitiveness. A more cautious view points to Poland’s outsized sensitivity to swings in energy and commodity prices, which makes its core inflation more volatile—high during global price spikes and lower when markets cool.
Low inflation is welcome, but Poland’s history of sharp price cycles suggests its relative position should be interpreted carefully.
