In brief

• The National Bank of Poland raised its 2027 average inflation forecast to 4.2% from 2.7%.
• The bank expects inflation to peak above 4.5% in the first half of 2027 and returns to target only in late 2028.
• GDP growth is forecast at 2.8% in both 2027 and 2028, driven mainly by investment.
• Energy costs and the unincluded ETS2 system are the main risks to the outlook.

Inflation forecast revised sharply upward

The central scenario in the National Bank of Poland's November projection puts average annual inflation at 4.2% in 2027, up from 2.7% in the July forecast. That is an increase of 1.5 percentage points. (Wydarzenie Kluby „Gazety Polskiej” w Jeleniej Górze zapraszają na protest w obronie Trybunału Konstytucyjnego, 15 listopada, g. 16, Plac Ratuszowy, Jele… – tvrepublika.pl) (Nowa prognoza NBP pełna zmian na gorsze. To za chwilę czeka Polskę – WNP.pl)

The sharpest price pressure is expected in the first half of next year. Inflation is projected at 4.6% in both the first and second quarters, easing to 4% and then 3.8% in the two following quarters.

The bank also raised its 2028 outlook. Average inflation is now seen at 2.8%, compared with 2.2% previously. The return to the 2.5% target is pushed to the third quarter of 2028.

Growth expected to slow

Economists at the central bank project GDP growth of 2.8% in both 2027 and 2028. Investment, rather than consumer spending, is expected to drive most of that expansion. Household spending is losing momentum, according to the same projection. (Dramatyczna prognoza NBP. Inflacja mocno wzrośnie, gospodarka spowolni – burbonik.pl)

Energy costs and ETS2 remain the main risks

Higher energy prices are among the main reasons for the revision. The projection does not include the expected costs of the ETS2 emissions trading system in its base scenario, which adds a further risk to the price outlook. Firms face higher costs while consumers have less room to absorb them, a tension the projection highlights.

The forecasts depend on the assumptions built into the central scenario. If energy prices or policy costs move differently, the path of inflation could change.

Read also

• Inflation in Poland seen rising to 4.2% in 2027 under NBP's November projection
• Polish inflation slows to 3.5% in October, below market forecasts