Poland's inflation falls to 3.5% in October: Prices drop 0.4% from the previous month

Poland’s consumer prices in October were 3.5% higher than in the same month a year ago. This was reported by the Central Statistical Office (GUS) in its flash estimate released on October 30. Compared to September, prices fell by 0.4%. GUS states that prices “rose by 3.5%.” The reference is to the “corresponding month of the previous year” (translated from English).

Inflation slowed in October. The published summary does not include figures broken down by product category. The flash estimate is preliminary; GUS may still adjust the figures in the final report.

Wages Are Growing Faster Than Prices

Real incomes continue to rise. According to GUS, employees at companies earned an average of 5.9% more in September than a year earlier. In August, the increase was 5.6%. Deutsche Bank Polska summarizes these data in its market commentary dated October 27. The latest wage growth is 2.4 percentage points above October’s inflation rate.

Industrial production rose by 4.6% year-over-year in September. Compared to August, it increased by 17.0%. Retail sales grew by 3.3% in real terms compared with the previous year but fell by 3.8% compared with the previous month. The registered unemployment rate remained at 5.8%. That is 0.2 percentage points higher than a year ago.

Interest rates to remain at 3.75% for now

According to Deutsche Bank Polska, the National Bank of Poland’s (NBP) key interest rate stands at 3.75%. The bank expects it to remain unchanged through January 2027. It forecasts a rate of 4.00% starting in February 2027 and 4.25% starting in June. Its forecast table had projected inflation of 3.8% for October. The reported figure of 3.5% is lower than that.

Deutsche Bank Polska does not anticipate a sustained decline. Its forecast calls for 3.9% in November and 4.0% in December. It expects 4.3% in January and February 2027, and 4.6% in June. The October figure would then represent a temporary respite, not a turnaround.

The decline in core inflation, the bank writes, gives the interest rate committee “another reason” not to change interest rates for the time being.

Deutsche Bank Polska also points to a correction in public finances. The government deficit in 2025 stood at 7.2% of GDP, not 7.3%. This figure is well above the 3.0% ceiling set by the EU Stability Pact. It limits the government’s leeway to provide relief to consumers and businesses.

For German exporters, this means that purchasing power in Poland is growing, while interest rates will remain low for the time being. Those supplying consumer goods or machinery to Poland can plan on stable demand. However, weak retail sales in September call for caution when planning inventory levels. Investors should factor the expected interest rate turnaround, beginning in February 2027, into their financing plans.

Sources: GUS (EN), Deutsche Bank Polska (EN)

SK, Frankfurt