This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Poland’s lower inflation is primarily driven by falling fuel prices, though this effect is gradually diminishing. Fuel prices dropped 4.9% year-on-year in September but only 1.8% in October – a result of soft global oil prices and dollar weakness.
Meanwhile, other categories saw increases. Energy prices rose 2.6% year-on-year, while food and non-alcoholic beverages climbed 3.4%. That said, food prices held steady month-on-month.
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Fullscreen The best of all worlds
Looking at the bigger picture, Poland currently stands out as one of the few countries in the region successfully balancing moderate inflation with solid economic growth. The IMF projects Polish GDP will expand by 3.2% in 2025.
When you compare Central and Eastern European economies on growth and inflation metrics, Poland clearly sits among those achieving balanced expansion with price stability. The framework I've used here is straightforward: countries are assessed against benchmarks of 2% real GDP growth and 3% inflation.
Interactive chart Fullscreen Most regional peers – five countries in total – fall into the “high inflation, weak growth” quadrant. Romania and Estonia are particularly challenged by elevated price pressures. The data makes it clear: from a macroeconomic standpoint, Poland continues to demonstrate remarkable resilience. Czechia, meanwhile, is only in its first year of GDP growth recovery – its cumulative economic expansion since 2020 still hasn't recovered to pre-pandemic levels.
Awaiting the NBP’s analysis
The National Bank of Poland (NBP) will release its key “Inflation Report” in November. October’s inflation figures provide some justification for the Monetary Policy Council to continue easing monetary policy. However, real economy data remains robust – particularly retail sales figures. The Council’s next moves will largely depend on how NBP analysts interpret this retail acceleration and its potential impact on inflationary pressures.
Key takeaways
- Moderate inflation driven by fuel prices. Inflation in Poland stood at 2.8% year-on-year in October, slightly below forecasts, mainly due to falling fuel prices, although this effect is weakening. Other sectors like energy and food still recorded price increases of 2.6% and 3.4% respectively, with food prices stable month-to-month.
- Balanced economic growth and inflation. Poland is among the few Central and Eastern European countries achieving a favorable balance between moderate inflation and solid GDP growth, with a 3.2% growth projection for 2025 by the IMF. Relative to regional peers, many face high inflation and weak growth struggles, while Poland demonstrates resilience and steady expansion.
- Monetary policy outlook hinges on retail and inflation trends. The National Bank of Poland (NBP) is expected to consider easing monetary policy given the moderate inflation readings, but will weigh this against the strong real economy indicators such as retail sales growth. The upcoming NBP Inflation Report will likely influence the Council’s stance on future policy moves.