In recent months, the MPC has moved away from its ultra-loose stance, while outside Poland, central bank attitudes have evolved in the opposite direction. The easing cycle should begin soon in the United States and the eurozone, and has already begun in the Czech Republic.
Inflation is falling sharply around the world, both in core and commodity prices. In Poland, headline inflation may even fall below 3.5% in the short term, but will rise again in 2Q24 after the partial lifting of the freeze on energy prices and the reintroduction of VAT on food. Furthermore, the high wage ratio makes disinflation less convincing in Poland than in other countries, especially in the medium term.
How will the MPC behave in this situation? Given the expected scale of easing in the US (150 bps), the eurozone (75 bps) and the Central and Eastern European region (Hungary almost 400 bps, Czech Republic 300 bps), if the NBP were to keep rates unchanged , this would lead to a significant strengthening of the zloty. . We therefore expect a cut of between 25 and 50 basis points in 2024. The next major meeting will be in March, when new projections are published.