The release updates the latest data on the Polish economy, including weak GDP data for the third quarter, slightly better industrial production and retail sales data for October, and a decline in construction output and assembly. The release highlights the significant contribution of regulated prices to the increase in CPI and high underlying inflation due to the high dynamics of service prices.

The overall message of the statement is similar to last month, but some slight changes can be noticed. Last month, the MPC was more dovish on the future outlook for inflation and rate cuts. The December press release indicates that the likely thaw in energy prices during the second half of 2025 constitutes a risk factor and could affect inflation expectations.

In our opinion, this note may indicate a slight hardening of the Council’s position and a very cautious approach towards regulated prices. Indeed, the government’s decision to freeze electricity prices is valid until the end of September 2025, but government officials have stated that prices should not be increased after the thaw period (we wrote to this topic here: https://think.ing.com/articles/poland-retail-electricity-energy-freeze/) .

Moreover, the MPC ignored the changes in external conditions and the overall message from national data suggesting an “economic freeze” in the second half of 2024. However, we await tomorrow’s press conference from the NBP chairman as it will set the tone for communication. .