Shoppers keep spending, prices keep rising, and the fight over the institutions spreads to the central bank

POLAND - Report 27 Oct 2026 by Jan Hagemejer and Artur Radziwill

The economy is still growing at about 3.5% a year. The slowdown in September retail sales comes almost entirely from fuel stations, after the end of the fuel relief in September pushed pump prices up by a third. Sales excluding fuels grew 5.9% y-o-y in September, the fastest this year. Industry also beat forecasts. We expect GDP growth of 3.7% y-o-y in the third quarter and 3.3% in the fourth, for a full-year growth rate of 3.7% in 2026 and 3.1% in 2027.

Inflation is the bigger problem. CPI rose to 4.1% in September, producer prices to 6.1%, and two of the four core measures jumped. Credit is also speeding up: loans to households grew 7.5% y-o-y in September, up from 3.1% a year earlier. The fuel relief returned on October 3, and with the parliamentary election due in the autumn of 2027 we assume it will stay in place for all of next year. Electricity and gas tariffs may still rise in January. We expect CPI to average 3.6% in the fourth quarter and 3.3% in 2027, peaking at about 3.9% in early 2027. This is above the 3.0% in the latest NBP survey of forecasters, but that survey has a bit of a lag. We expect the MPC to hold in November, raise the rate by 25bp in December and again in March 2027, to 4.25%, and then hold until the end of 2027.

Politics are now weighing on the markets more than at any time this year. The coalition lost a minister and a vote during the same week, the President blocked appointments to the Constitutional Tribunal and the NBP board, and the Sejm will vote in the second half of November on bringing the NBP governor before the State Tribunal. The 10-year yield reached 6.47% on October 23, highest since March 2023, and the zloty weakened.

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