NBP projects Polish inflation falling to 2.2% by 2028, GDP growth at 3.7% this year

Inflation path

The NBP’s central scenario shows inflation falling steadily from 2.9% at the end of 2026 to 2.7% in 2027 and 2.2% in 2028. That keeps CPI within the central bank’s 2.5% target band (plus or minus one percentage point) throughout the projection horizon. Core inflation, which strips out food and energy, is expected to run at 3% in both 2026 and 2027 before easing to 2.4% in 2028.

In 2026, core inflation will remain elevated due to strong price growth in transport and leisure services. Rising raw material costs and disruptions in global supply chains have reversed the deflationary trend in imports.

GDP outlook

Central-path GDP growth is forecast at 3.7% this year, slowing to 2.8% in 2027 and then picking up to 3% in 2028. The NBP says this year’s expansion will roughly match the 2025 outturn but come in below the March projection. Two forces are pulling in opposite directions: the absorption of EU funds is peaking now, providing a temporary lift, while higher global energy-commodity prices are acting as a drag. As the EU-funded investment cycle tapers off in subsequent years, growth is set to moderate.

Supply shock from the Middle East

The bank attributes the recent pickup in CPI directly to a supply shock caused by the conflict in the Middle East, which pushed up prices of energy commodities on world markets. After dropping to 2.1% year-on-year in both January and February, headline CPI climbed to 3.1% in May, the report notes.

After the March projection was closed, Poland experienced another supply shock in recent years — a rise in global energy commodity prices triggered by the Middle East conflict. This shock pushed CPI from 2.1% y/y in January–February to 3.1% y/y in May. As a result, CPI inflation in 2026–2027 will remain higher than assumed in the previous projection.

The impact is expected to linger into the second half of 2026 before fading in 2027–2028 as the shock works through the system. In the short term, however, Polish households face a July spike in fuel and energy prices as a government fuel-subsidy programme ends; the bank forecasts a return to normal global energy markets by the fourth quarter.

Food prices and delayed effects

For now, cheaper food is acting as a brake on overall inflation. The NBP notes a marked drop in food-price growth in the second quarter: more processed food reached the market, meat became cheaper thanks to higher supply on EU markets, and domestic harvests plus imports depressed vegetable prices. That relief will be temporary. In 2027, food inflation is set to re-accelerate as higher production costs (especially for fertilisers, a direct consequence of the Middle East conflict) feed through with a delay.

Risks tilted to the upside for 2028

The NBP flags the further course of the Middle East war as the primary risk to the projection. A scenario without a lasting peace deal, accompanied by continued restrictions on shipping through the Strait of Hormuz, could disrupt energy supplies and keep insurance costs for sea transport elevated. Conversely, a swift peace accord, reopening of the strait and a partial lifting of sanctions on Iranian oil exports would push energy prices below the baseline path.

A second risk emerges in 2028: the planned launch of the EU’s new emissions trading system, ETS2, introduces considerable uncertainty for domestic prices. On top of that, domestic fiscal policy could influence the inflation trajectory; high budget deficits may require public-spending cuts, which would weaken demand and act as a disinflationary force. The central bank judges that the balance of risks is roughly symmetric for GDP but skewed to the upside for CPI in 2028.

Monetary policy on hold

The Monetary Policy Council kept its reference rate unchanged at 3.75% on July 8, the fourth consecutive hold. The last move was a 25-basis-point cut in March 2026, after a cumulative easing of 2 percentage points over the preceding year. With inflation projected to stay within the target band and the supply shock still unwinding, the Council looks set to maintain its wait-and-see stance.