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 (NBP) would like. What lies behind this result, and how might it affect decisions on interest rates?
Inflation in April 2025: The Latest Data
According to preliminary data from Statistics Poland (GUS), the consumer price index (CPI) rose by 4.2% in April compared with April 2024. On a monthly basis, prices increased by 0.4% compared with March. This is a clear decline from previous months, when inflation had remained at 4.9%.
Inflation Components: What Got More Expensive and What Got Cheaper?
In April, the strongest price increases were recorded for:
- food and non-alcoholic beverages – up 5.3% y/y,
- energy carriers – as much as 13% y/y.
On the other hand, fuels for private transport became 8.3% cheaper y/y, which eased the overall rise in prices.
Inflation Data
| Category | Change y/y | Change m/m |
|---|---|---|
| Overall inflation | 4.2% | 0.4% |
| Food and non-alcoholic beverages | 5.3% | 0.8% |
| Energy carriers | 13.0% | -0.4% |
| Fuels for private transport | -8.3% | -1.7% |
Why Is Inflation Falling?
Economists point out that the decline in inflation is due mainly to the fading of the so-called low base effect following last year’s VAT increase on food, as well as a slower pace of price growth in this category. It is worth noting that although energy price dynamics remain high, the drop in fuel prices is clearly helping to restrain overall inflation.
Is the End of High Inflation Near?
The April reading is the lowest since July last year and slightly below market expectations. However, inflation still exceeds the NBP’s target (2.5% ±1 percentage point), so full price stabilisation is still a long way off. Much depends on developments in global commodity markets and on decisions taken by domestic monetary authorities.
What Next for Interest Rates?
The fall in inflation to 4.2% is an important signal for the Monetary Policy Council (RPP). Economists expect that as early as May we could see the first interest rate cut in a long time. Such a move would aim to support the economy and lower borrowing costs, although the question remains whether inflation will indeed keep falling.
What Does the Inflation Reading Mean for Consumers?
- Prices are rising more slowly than in previous months, but still faster than the NBP’s target.
- The most noticeable increases concern food and energy, but cheaper fuel is easing the rise in the cost of living.
- The drop in inflation offers hope for lower loan instalments in the coming months.
It is worth following upcoming inflation readings and the decisions of the Monetary Policy Council (RPP), as these will determine whether the improvement will last or whether it is only a temporary relief for our wallets.
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