Page 20 - bne IntelliNews Poland Outlook 2025

other central banks in the region. By the end of the year, the 10-year bond yield is expected to decline to 5.00%. Over the course of 2025, largely due to anticipated rate cuts, there also appears to be a consensus concerning the steepening of the yield curve, particularly in the second half of the year.
That the downward trend in Polish bond yields could accelerate by the end of 1Q 2025 is supported by historical seasonal patterns related to debt issuance. These suggest a concentration of issuances in the first three months of the year – even though debt issuance calendar for 2025 released by the Ministry of Finance generally anticipates three auctions per month.
Analysts noted in late 2024 that by early 2025, only 10%-20% of the full-year borrowing needs will have been pre-financed. This is relatively low, considering that in previous years it was as much as 40%. This will mean a bigger dependence on investor sentiment and global market conditions, which could become problematic if sentiment worsens just as Poland will be looking to place large debt issuances.
Risks that could affect Poland’s plan of debt placement include geopolitical risks, such as the escalation of the conflict in the Middle East, unforeseen developments in Russia’s war against Ukraine, or economic and political decisions by President Donald Trump.
Overall, however, economists believe that under favourable circumstances, even in 2025, hundreds of billions of Polish debt could be placed without paying excessively high interest rates. If the central bank rates begin to decline in Poland, however, it could be a positive. Still, some analysts noted that the NBP’s monetary easing may not translate into lower yields automatically, since investors, observing Poland’s enormous borrowing needs over the next several years, will expect a larger spread, that is, an additional risk premium.
20 Poland Outlook 2025 www.intellinews.com