(Bloomberg) -- Governor Adam Glapinski signaled Poland’s central bank may start cutting interest rates from the second quarter of 2025 as he’s turned more dovish since last month’s policy meeting.
Glapinski said economic data in Europe has weakened in past weeks, which is bound to reduce price pressures in Poland. The zloty weakened by as much as 0.4% against the euro following his comments.
Poland’s inflation rate, which has climbed above the policymakers’ target in past months, now largely depends on whether the government will extend energy price caps due to expire at the end of 2024, he said.
The National Bank of Poland has not joined a spree of rate cuts across Europe this year, keeping its benchmark at 5.75% for the last 12 months. It’s waiting until it sees prospects for inflation — currently at 4.9% — to drop toward its target, according to the governor.
“It could happen in March, April, or earlier,” Glapinski told reporters on Thursday, when asked about the timing of a potential rate cut.
In the “optimistic” scenario, Glapinski said, the central bank’s forecast in March will show that inflation has stabilized and may decline toward the 2.5% target. That could in turn fuel talks within the MPC about starting a cycle of rate cuts.
Glapinski is pivoting after saying in July that rate cuts may only take place in 2026. Last month he declined to specify whether he backed multiple rate cuts next year, while on Thursday he referred to a “cycle” of reductions.
“I’ve become softer, looking at the causes of inflation,” Glapinski said. “I see that economic growth abroad has stalled. I hope that these factors will mean that the March projection will convince MPC members to start a cycle of cuts.”
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