In April 2025 inflation in Poland fell to 4.2% year-on-year. This is the lowest level in months, but prices are still rising faster than the National Bank of Poland would like. What is behind this result and how can it affect interest rate decisions?
Inflation in April 2025 – latest data
According to the preliminary figures of the Central Statistical Office, the index of consumer goods and services (CPI) increased by 4.2% in April compared to April 2024. Monthly prices increased by 0.4% compared to March. This is a clear decrease from previous months when inflation remained at 4.9%.
Inflation components – what is more expensive and what is cheaper?
In April prices increased most:
- food and non-alcoholic beverages – 5.3% y/y,
- energy carriers – up to 13% y/y
On the other hand, fuels for private means of transport sank by 8.3% y/y, which eased the overall price increase.
Inflation data
| Category | Amendment r/r | Modification m/m |
|---|---|---|
| Total inflation | 4,2% | 0,4% |
| Food and non-alcoholic beverages | 5,3% | 0,8% |
| Energy carriers | 13,0% | -0,4% |
| Private transport fuels | -8,3% | -1,7% |
Why is inflation falling?
Economists point out that inflation falls mainly due to the expiry of the so-called low base effect after last year's increase in VAT on food and the slower pace of price increases in this category. It is worth noting that while energy price dynamics remain high, the fall in fuel prices clearly helps to reduce overall inflation.
Is this the end of high inflation?
The April reading is lowest since July last year and slightly lower than the expectations of the market. However, inflation continues to exceed the NBP target (2.5% ±1 percentage point), so it is still a long way to fully stabilise prices. Much depends on the world's raw materials markets and the decisions of the national monetary authorities.
What's next on interest rates?
The fall in inflation to 4.2% is an important signal to the Monetary Policy Council. Economists predict that in May we can witness the first long-term interest rate cuts. Such a move would aim to support the economy and reduce the cost of loans, although the question remains whether inflation will actually continue to decline.
What does reading inflation mean for consumers?
- Prices are rising slower than in previous months, but still faster than the NBP targets.
- The most noticeable increases concern food and energy, but cheaper fuels mitigate the increase in cost of living.
- The fall in inflation gives hope for lower loan instalments in the coming months.
It is worth following the readings and decisions of the Monetary Policy Council – they will decide whether the improvement of the situation will continue, or it is only a temporary relief for our portfolios.
