(Bloomberg) -- Poland will likely hold borrowing costs unchanged on Wednesday despite growing pressure from the government and central bank peers to begin monetary easing.
The rate-setting Monetary Policy Council is set to leave the benchmark rate at 5.75% on Wednesday, according to all 31 economists surveyed by Bloomberg. With rates unchanged for almost a year, Central bank Governor Adam Glapinski has sought to hold the line against growing calls to cut rates as inflation subsides from post-pandemic highs.
Glapinski reinforced his hawkish position in July, declaring that rate cuts may be out of the question until 2026 — a forecast that prompted pushback from other members of the rate-setting panel, including allies. He rowed back on that timeline last month, saying easing could be considered earlier.
As the Polish central bank chief returned from the annual US Federal Reserve symposium in Jackson Hole in August — where monetary peers including Fed Chair Jerome Powell signaled a shift to easing — he faced mounting pressure from the government and markets to change gears.
Poland’s Finance Ministry, which unveiled next year’s budget draft last week, forecast that the National Bank of Poland will begin gradual easing in the second quarter of next year. Prime Minister Donald Tusk and Finance Minister Andrzej Domanski have both accused the central bank chief of posing a threat to economic growth.
Glapinski, who will hold his monthly press conference at 3 p.m. on Thursday, may also wield arguments in favor of a more cautious stance. Tusk introduced an expansionary fiscal policy for next year, while consumer prices have rebounded.
The rhetoric of policymakers, including Glapinski, “may influence the pricing of the total scale of monetary easing in 2025,” Bank Millennium economist Mateusz Sutowicz said in a note. “We assume a 75 basis point drop in rates, while the financial market is pricing a 125 basis point cut.”
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