This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Interactive chart Between 2004 and 2025, Poland’s average annual inflation rate came in at 3.4% - within the target range. Admittedly, price growth tended to hover closer to the upper bound than to the midpoint. Even so, it remained within the acceptable limits defined by the target.
Interactive chart It is worth noting that this period included a three-year episode of elevated inflation. Inflation reached 5.1% in 2021, surged to 14.2% in 2022, and stood at 11.5% in 2023. Despite this spike, the long-term average remains within target. This is partly due to the years 2013–18, when price growth was exceptionally subdued. Over those five years, inflation averaged just 0.6%. For two of those years, the economy even experienced deflation, with average prices declining.
The median inflation rate in Poland since 2004 has been slightly lower than the mean, at 3%. By definition, this is the value that splits the dataset in half – over the 22-year period, inflation was below this level in 11 years and above it in the other 11. The fact that the median is lower than the mean is largely a result of the aforementioned period of very high inflation.
One might argue: even if average inflation falls within the target, the annual rate has been within the 1.5–3.5% band in only eight of the past 22 years – so not even half the time. In nine years, inflation exceeded the upper bound, while in five it fell below the lower bound. Does this really qualify as a success for monetary policy?
Yes – because the target is defined over the “medium term”. In practice, what matters most is that it anchors inflation expectations and prevents inflation from drifting out of control over the long run.
Poland against its peers
Between 2004 and 2025, Poland ranked among the region’s larger economies with moderately low inflation. Average annual price growth in Czechia and Slovakia was just 0.1 percentage points lower than in Poland. By contrast, inflation was markedly higher in Hungary (4.8%) and Romania (5.4%). As in Poland, the median in these economies also exceeded the mean. Developed economies, meanwhile, were characterized by lower inflation.
Inflation, however, is best assessed alongside economic growth. There is a positive relationship between the two: put simply, stronger growth reflects rising demand, which in turn tends to push prices up more quickly.
There is a clear positive correlation between inflation and economic growth
Interactive chart On growth, Poland was the clear leader among the countries analyzed. Average annual GDP growth reached as much as 3.8%, visibly outpacing both Czechia and Slovakia – economies with similar inflation profiles. In this context, Poland’s inflation performance can be seen as a success.
The target works
At least two important conclusions can be drawn from these data.
- Monetary policy in Poland, based on an inflation-targeting framework, has proved effective at stabilizing inflation over the long term. This is not to say it has been flawless. With the benefit of hindsight, one can point to missteps, delays and the like. But that does not alter the overall assessment: it has been effective.
- Over the long run, it certainly does not hinder economic growth – indeed, one could argue it supports it, as cross-country comparisons within the region suggest.
What next?
Over the long term, inflationary pressure in the Polish economy should ease. This follows from structural factors. As Poland converges toward the income levels of the most advanced economies, its growth rate is likely to slow. Demographic ageing will push in the same direction.
A risk to the inflation outlook, however, is the increasingly volatile external environment. In just the past six years, the global economy has been hit by three major shocks – the pandemic, the war in Ukraine and, more recently, tensions in the Middle East. Unfortunately, such events, with their significant impact on prices, are likely to recur.