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Inflation is picking up in 2026. What does that mean for the zloty exchange rate?
EY: core inflation could reach 3,0 percent in 2026, while the MPC is likely to wait before making any moves
Core inflation in 2026 is expected to come in at 3,0 percent, and in 2027 at 3,5 percent, while interest rates will remain unchanged, EY analysts said. In their view, the Monetary Policy Council should stay cautious and avoid reacting too quickly to a single price reading.
The experts noted that inflation has once again moved above target. The CPI (Consumer Price Index) rose from 2,1 percent y/y in February to 3,1 percent in May. The increase was driven by higher fuel prices, although tax cuts and price caps partly limited the rise.
The report also said that core inflation, a measure of prices excluding the most volatile categories, has also picked up. EY estimates that headline inflation may continue to rise and approach 3,5 percent by the end of the year.
Analysts also expect food inflation to accelerate next year. The reason is said to be a delayed pass-through of higher fertiliser and commodity costs into prices. In their view, average core inflation in 2027 will be 3,0 percent, before gradually easing later on.
Prices may also be affected by the lasting impact of the conflict in the Middle East and the planned expansion of the emissions trading system, or ETS. According to EY economists, the preliminary May data argue for a wait-and-see approach rather than near-term monetary tightening.
That means the NBP (Narodowy Bank Polski — National Bank of Poland) will likely keep its reference rate at 3,75 percent. As the report noted, if inflation does not stay above 3,5 percent, the threshold cited by the head of Poland’s central bank, there are no strong arguments today for a quick easing of monetary policy.
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