Economic Analysis

In today's Eyeopener

- Today, in the afternoon, we will learn the Monetary Policy Council’s interest rate decision 
- According to BIK, the value of mortgage loan applications increased by 14.5% y/y in August
- EURPLN edged slightly higher, while bond yields declined marginally

While fiscal issues were the main topic at the end of the summer holiday period (we recommend our report discussing the 2027 budget draft), the focus is likely to shift towards monetary policy in the coming days. Key events will include the MPC's policy meeting (decision on Wednesday, NBP Governor's press conference on Thursday), as well as meetings of the ECB (Thursday) and the FOMC (the following Wednesday). Inflation releases from abroad will also be important, as they may reveal the extent to which elevated commodity prices are feeding through into global price pressures. (...)

The 2027 budget draft marks yet another year in which Poland is being pushed onto a less optimistic fiscal path, with both the deficit and public debt set to exceed previously expected levels by a significant margin. Poland is expected to remain Europe’s leader in both economic growth and fiscal imbalances, demonstrating that GDP growth alone is insufficient to stabilise public finances. (...)

The 60-day ceasefire agreed by the US and Iran has sent a wave of optimism across markets. Even though the peace talks are still in progress, with the final result uncertain and shipping through the Strait of Hormuz remaining subdued, oil and gas prices have decreased to their lowest levels since early March, significantly reducing worries about further deterioration of the economic outlook. The return to business-as-usual will probably take some time and the disruption in global commodity supplies witnessed in 2Q has already taken its toll on 2026 inflation and GDP forecasts, but at least the risk of further revisions due to rising energy costs has declined. That should allow markets to focus on other issues, like the surprisingly hawkish rhetoric of the new Fed chair or the extreme heatwave sweeping through Europe with a potential to affect not only food prices but also economic activity (...)