Interest rates, inflation data. The most important economic events in the first week of April

Marek Zuber on interest rates in Poland TVN24

One of the key economic events of the week will be the decision by the Monetary Policy Council regarding interest rates, along with a press briefing by the President of the National Bank of Poland. Additionally, we will receive the CPI inflation figure and the PMI index for the Polish industrial sector for March, as well as data concerning the public finance sector deficit projected for 2024.

The week on the domestic market will kick off with the release of the preliminary inflation figure for March. Economists surveyed by PAP Biznes anticipate a slight uptick in CPI this month – to 5.0% year-on-year, up from 4.9% in February. Predictions vary from 4.9% to 5.2%.

„Our CPI projection suggests stabilization at the levels observed in January and February, specifically at 4.9% year-on-year, with consumer prices rising by 0.2% month-on-month. This outcome is attributed to a relatively minor change in food prices for this month (estimated at 0% month-on-month) and a decrease in fuel prices by approximately 2% month-on-month, coupled with heightened price momentum in basic categories (around 0.6% month-on-month),” forecast the economists at Santander BP.

„The uncertainty surrounding these estimates is heightened by the fact that after the revision of the weights in the inflation basket, we currently lack more detailed data from the Central Statistical Office, which would facilitate a more accurate calculation of the annual CPI dynamics,” they further explain.

The CPI data set to be released on Monday will be crucial for the Monetary Policy Council’s evaluation of inflation trends, as they convene for a two-day meeting on Tuesday. Following the conclusion of the meeting on Wednesday, the Council will disclose its decision regarding interest rates. The market does not anticipate any alterations to monetary policy parameters.

Rates are likely to remain steady

„The Monetary Policy Council is expected to maintain the current interest rates. However, we are particularly interested to see if the NBP President’s remarks and the ensuing conference will include any references to the recent string of weaker-than-anticipated economic data, which we believe suggests an improvement in inflation expectations through the end of this year compared to the NBP’s March forecast,” economists from Santander BP indicate.

„We do not dismiss the possibility that a proposal to lower interest rates could arise at the upcoming meeting, though given the comments made by MPC members in recent weeks, we assess that it would have a very slim chance of garnering majority support,” they add.

During last week’s Banking Forum in Warsaw, NBP President Adam Glapiński reiterated that there is currently no justification for altering interest rates, considering that inflation, including core inflation, remains high and is unlikely to reach the target in the forthcoming months. NBP Vice President Marta Kightley echoed similar sentiments on Friday. In an interview with the Interia portal, she noted that the prevailing level of NBP interest rates is favorable for achieving the inflation target in the medium term, and there are presently no grounds for rate cuts.

State bonds

At the week’s outset (Monday), the Ministry of Finance will unveil its bond supply plan for the second quarter along with a detailed plan for April. The annual Treasury bond issuance strategy indicates that in the second quarter of 2025, the Ministry of Finance plans to conduct three bond auctions each month—sales or exchanges, contingent upon the budget and market conditions. The Ministry of Finance also intends to regularly issue treasury bills.

In addition to the Ministry of Finance’s plans, Bank Gospodarstwa Krajowego will also disclose a bond supply strategy for the second quarter on Monday—pertaining to the COVID-19 Counteraction Fund. In the first quarter, BGK conducted five auctions. At the end of January, Piotr Marczak, the managing director of the financial markets division at BGK, informed PAP Biznes that as part of the issuance for the FPC, BGK aims to increase the proportion of bonds issued in the domestic market.

Data on industry and unemployment

On Tuesday, investors will receive the PMI for the Polish industrial sector for March. In February, the PMI was recorded at 50.6 points, compared to 48.8 points in January. This marks the first time the PMI has risen above 50 points since April 2022.

„We anticipate an increase to 50.8 points, indicating a further enhancement in industrial sentiment, in line with similar indices from Western Europe,” state economists at Santander BP.

On Tuesday, domestic investors will also be presented with the 2024 public finance sector deficit estimate, to be published by the Central Statistical Office. According to the Medium-Term Budgetary and Structural Plan for 2025-2028 approved by the government, the deficit for 2024 is projected to reach 5.7% of GDP, gradually decreasing to 5.5% of GDP in 2025, 4.5% of GDP in 2026, 3.7% of GDP in 2027, and 2.9% of GDP in 2028

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