MNI NBP Review - Dec 2024: Energy Prices Fuel Hawkish Rhetoric
Executive Summary:
- The MPC left the reference rate unchanged at 5.75%.
- The Governor said that the shape of energy price caps complicates the CPI outlook.
- Forward guidance turned more hawkish, with rate-cut debate no longer seen in March.
Click here to see the full review: MNI NBP Review - December 2024.pdf
Although the National Bank of Poland (NBP) delivered another well-telegraphed, widely anticipated on-hold rate decision, the subsequent press conference with Governor Adam Glapiński may have been the most surprising one this year. The official ditched earlier guidance pointing to the potential for a rate-cut discussion in March and said that it will likely be pushed back to October, while decisions may need to wait until 2026. The abrupt change in guidance was underpinned by a somewhat confusing interpretation of the outlook for administered energy prices. Although the announcement of the plan for continued household energy price caps reduced uncertainty on that front, while the partial extension of current measures for the first nine months of 2025 fell in between extreme scenarios, the central bank said that it will complicate the inflation path and raise questions about the inflation trajectory in 2H2025.