Page 11 - bne IntelliNews Poland Outlook 2025

Without any reduction in NBP rates throughout 2025, real NBP interest rates are set to rise, widening the interest rate differential between Poland and major economies, which could further support PLN appreciation.
Despite the dollar's solid appreciation, rising domestic asset swap rates and a gradual deterioration in the current account balance – the 12-month surplus dwindled to just 0.3% of GDP in October, compared with 1.6% of GDP in December 2023 – the EUR/PLN rate has consistently traded within the 4.20-4.40 range, as it has for most of 2024.
This range is expected to persist throughout 2025, analysts tend to say. Key factors anchoring the zloty include the delayed start of a rate-cutting cycle by the NBP, contrasting with other central banks, and Poland's relatively strong economic performance compared to Western Europe.
Additional supportive elements include a potential Russia-Ukraine agreement, anticipated in 2025, and continued inflows from the EU's Recovery and Resilience Facility (operating as KPO in Poland).
Risks to the zloty in 2025 are primarily linked to geopolitical factors such as trade wars and European elections, which could negatively affect global economic conditions. Another potential source of volatility lies in the NBP's communication with the market regarding monetary policy outlooks. However, risks appear asymmetrical, with a slightly higher likelihood of moderate depreciation in 2025 compared to current levels.
That said, given the zloty’s favourable performance in late 2024, any declines could be limited. Negative factors include the resurgence of a strong US dollar in Q1 2025 and substantial issuances of Polish government bonds requiring discounts to attract foreign investors.
A deterioration in the current account balance in 2025 is also on the cards, as the public investment boom, fuelled by EU funds, will coincide with persistently weak exports. On the other hand, GDP growth, although historically modest, remains one of the highest in the EU, providing a supportive backdrop for the zloty.
If the zloty were to break the 4.35 barrier against the euro, however, it could mark embarking on a sustained depreciation level not seen since 2023. Analysts do not see it as a baseline scenario, yet do not rule it out altogether.
11 Poland Outlook 2025 www.intellinews.com