Poland Interest Rate Forecast For Next 5 Years

The flag of Poland in the Blue sky and the center of Warsaw in the background
Unexpected NBP hike pause tempers expectations about Polish interest rates. Photo: Velishchuk Yevhen / Shutterstock

Interest rates in Poland have surged from record lows to its highest in nearly two decades in 2022. The Polish central bank has emerged as one of the most aggressive policy makers, having conducted 11 interest rate hikes since October 2021.

Poland’s central bank stopped short of implementing 12 consecutive interest rate hikes as it maintained rates at 6.75% in its October monetary policy meeting. What does this mean for the Poland interest rate forecast?

What is Narodowy Bank Polski?

The Narodowy Bank Polski (NBP) is the central bank of the Republic of Poland. The NBP is responsible for setting interest rates, issuing national currency and the management of foreign currency reserves, among others.

The NBP pursues an inflation targeting strategy with the objective of keeping annual inflation at a target of 2.5% with a symmetric band for deviations of +/-1% in the medium term.

According to the NBP, interest rates constitute its key instrument of monetary policy. NBP’s other monetary instruments include open market operations, required reserve system and standing facilities.

It should be noted that Poland is a European Union (EU) member state, but does not use the euro as its legal tender. The Polish zloty (PLN) is the country’s legal tender, which is issued by the NBP. Monetary policy in Poland is conducted by the NBP. Poland is expected to adopt the euro as its legal tender at some point in the future.

“All EU countries except Denmark, which has an opt-out, are expected to join the monetary union and to introduce the euro as soon as they fulfil the convergence criteria,” said the European Central Bank (ECB).

“In the future, when the euro becomes legal tender in Poland, the European Central Bank will be the issuer of notes while NBP will remain the issuer of coins,” the NBP added.

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Poland’s interest rate timeline 

Historical data on Poland interest rates compiled by Trading Economics showed that the benchmark reference rate trended above 15% at the start of the millennium. Data indicated Poland interest rates rose to a high of 24% between 1998 and 2022.

Poland’s interest rates, 1998 - 2022

The NBP cut the rate to 5% by 2004 following which there were multiple periods of rate hikes and cuts, notably during the financial crisis of 2008.

In May 2020, the NBP cut interest rates to a record low of 0.1% in order to support economic growth during the Covid-19 pandemic. At the time, ECB interest rates fell to -0.5%.

The NBP held Poland interest rates at 0.1% for the next 17 months until October 2022. Rising inflation prompted the Polish central bank to embark on a rate hike cycle.

The NBP conducted 11 consecutive rate hikes between October 2021 and September 2022, taking interest rates from a record low of 0.1% to 6.75%, its highest in nearly two decades.

The central bank stopped short of making its 12 consecutive Poland interest rate hikes as it kept the reference rate unchanged at 6.75% at its latest monetary policy council meeting held on 5 October 2022.

“Further decisions of the Council will depend on incoming information regarding perspectives for inflation and economic activity, including the impact of the Russian military aggression against Ukraine on the Polish economy,” said the NBP.

The NBP has two more monetary policy meetings in 2022, scheduled for 9 November and 7 December.

Poland interest rate forecast for next 5 years: Key drivers

Let’s take a look at the key factors that could influence a  Poland long-term interest rate forecast.


Inflation is the key reason why central banks across the world have started interest rate hike cycles in 2022. 

Any Poland interest rate prediction could be heavily influenced by economic data, especially on inflation. The current Polish rate hike cycle, which started in October 2021, came after annual inflation was reported consistently above 5% in the second half of 2021, compared to the NBP’s inflation target of 2.5%.

Inflation in 2022 has come in higher following Russia’s invasion of Ukraine, which has tightened the supply of energy and commodities. Curbs to Russian energy supplies into Europe have particularly hit European nations due to their dependence on Russian energy imports. 

The ECB noted:

“Prices have increased a lot owing to the war, especially for energy and food. Many companies are also finding it more difficult to get the materials, spare parts and workers they need for production, which is worsening problems that were already there because of the pandemic.”

The latest Polish inflation data for September 2022 came in at a 26-year high of 17.2%, with dwelling, food and clothing items seeing the biggest price increases.

With inflation in Poland showing no signs of easing, there could be further rate hikes to come.

“What higher rates will do, though, is keep inflation expectations under control. If people and businesses think high inflation is here to stay, workers are likely to demand higher wages and employers may in turn put up their own prices. 

“This is often referred to as a wage-price spiral. We will keep raising interest rates — making credit more expensive and savings better rewarded – to prevent such a spiral,” explained the ECB.

Economic growth

Economic growth is a key consideration for central banks when implementing rate hikes or rate cuts. Therefore the NBP’s outlook for economic growth will be influential in interest rate predictions in Poland.

We can look at the rate cuts conducted in 2020 as an example of how central banks look to kickstart or sustain economic growth by reducing interest rates. Back in 2020, the world was under strict lockdowns to curb the spread of the Covid-19 virus. Policy makers cut rates to record lows in order to support economies against corporate bankruptcies, job losses and recession.

Today the policy maker’s priority has changed from economic resilience to inflation control. Many central banks are willing to risk economies from falling into recession in order to get inflation expectations under control and to prevent a price-wage spiral.

In the future if inflation rates in Poland fall under the NBP’s target range, the central bank may be prompted to stop its rate hike cycle and even begin cutting rates in order to reinvigorate economic growth. 

The NBP noted:

“The basic statutory objective of monetary policy is to maintain price stability. At the same time, monetary policy is conducted in a way that helps maintain sustainable economic growth and financial stability.”

Currency rates

The Polish central bank’s objective of financial stability comes with the responsibility of protecting the Polish zloty against foreign exchange depreciation.

Interest rates are key drivers of supply and demand of currencies in foreign exchange markets. More importantly, interest rate differentials between economies are influential in determining foreign exchange rates.

For example, when interest rates in Poland increase relative to interest rates in other countries. Polish assets such as government bonds become attractive to foreign and domestic investors. As a result more Polish assets are bought, capital inflows into Poland increase and demand for the Polish national currency rises.

It should be noted that the interest rate is one of the many factors that will affect the foreign exchange rates of the Polish zloty.

In 2022, the Polish zloty has lost nearly 15% year-to-date (27 October) against the US dollar, as of 27 October, despite the NBP coming out as one of the most aggressive central banks in the world.

USD/PLN exchange rate

The increasing demand for safe-haven currencies like the USD and the poor outlook for European economies has put the onus on the Polish central bank to double down on its efforts to protect the zloty from deteriorating further. 

The NBP said in an October policy meeting:

“NBP may intervene in the foreign exchange market, in particular to limit fluctuations of the zloty exchange rate that are inconsistent with the direction of monetary policy.”

Poland interest rate forecast for 2022 – 2024

As we have learnt, the Poland interest rate forecast for next 5 years could be dependent on factors such as inflation, economic growth, strength of the zloty and the outlook of the Russia-Ukraine war.

A look into the Polish inflation forecast from the NBP suggested that interest rates could remain elevated in the near term.

In July NBP forecasted CPI inflation to come in at 12.3% in 2023, compared to 14.2% for 2022. CPI inflation was expected to remain above the central bank’s 2.5% target in 2024, with CPI forecast at 4.1% for the year.

In terms of economic growth, the NBP expected the Polish gross domestic product (GDP) to grow 4.7% in 2022 before falling to 1.4% in 2023. The central bank saw GDP growth inching higher to 2.2% in 2024.

NBP’s Poland interest rate prediction indicated that no interest rate cuts are expected in 2023. The central bank saw three-month WIBOR interest rates at 6.2% in 2023 and 6.2% in 2024.

According to economic data provider Trading Economics’ interest rate predictions in Poland, the rates could rise to 8.25% by the end of 2022. Trading Economics’ Poland interest rate forecast projected the rates to trend at 6% in 2023. Yet the firm’s global macro models and analysts’ expectations stopped short of giving Poland interest rate forecast for next 5 years. 

The bottom line

Forecasting inflation rates and interest rates is a challenging task due to the uncertainties of the future. This was best displayed in 2022, when the start of the war in Ukraine threw a spanner in the works of the “transitory inflation” narrative that central banks across the world were hoping to realise. 

Policymakers globally are scurrying to clamp down on runaway inflation with larger-than-expected rate hikes, which were not anticipated a year ago. 

It is important to note that projected Poland interest rates in 5 years and short-term Poland interest rates outlook from analysts and experts can be wrong. 

Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence, looking at the latest news, technical and fundamental analysis.

Remember that your decision to trade or invest should depend on your risk tolerance, expertise in the market, portfolio size and overall strategy. And never trade money that you cannot afford to lose.


Is the interest rate going up in Poland?

The Polish central bank has conducted 11 consecutive interest rate rises between October 2021 and September 2022, taking rates from 0.1% to 6.75%.

How high will Poland interest rates go?

According to economic data provider Trading Economics’ interest rate predictions in Poland, the rates could rise to 8.25% by the end of 2022. Trading Economics’ Poland interest rate forecast projected the rates to trend at 6% in 2023. The firm’s global macro models and analysts’ expectations stopped short of giving Poland interest rate forecast for next 5 years.

Where will interest rates be in 5 years?

NBP saw 3-month WIBOR interest rates at 6.2% in 2023 and 6.2% in 2024. The Polish central bank did not give an interest rate forecast for 2027.

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