Interest rates, Adam Glapiński's conference, Central Statistical Office inflation. Calendar of economic events from September 30 to October 6

The key event of the week on the domestic financial market will be Wednesday's decision of the Monetary Policy Council regarding the level of interest rates. Their stabilization at the level of 5.75% is widely expected. – according to the latest PAP Biznes consensus, at least until the end of Q1 2025.

Only 6 out of 23 respondents surveyed before the October meeting of forecasting centers expect a rate cut in the first quarter of next year, and the median expectation indicates a resumption of reductions from the second quarter of 2025, starting from 25 basis points. per quarter and in total for the whole year by -100 bps. This distribution of forecasts has been maintained since the July PAP Biznes survey.

A similar scenario emerges from the recent statements of MPC representatives, who signal that the earliest moment for a possible rate reduction could be March 2025, although this would require exceptionally favorable macro circumstances. In this light, subsequent actions of the Monetary Policy Council are more likely.

Observers of Polish monetary policy will certainly pay attention to any references to the commenced interest rate cuts. in major economies and their impact on the development of the national cost of money or exchange rate.

The Council will review the preliminary reading before the meeting inflation for September (on Monday). According to the PAP Biznes consensus, CPI increased to 4.9 percent in September. y/y from 4.3 percent a month ago. Core inflation in September could amount to 4.2%. compared to 3.7 percent in August.

“The base effect has a large share in this, i.e. events from a year ago, such as the extension of eligibility for free medicines or a promotion on one of the largest streaming platforms. Fuel prices also showed a relatively large decline then, although they have clearly dropped now. This must be compensated for the effect of the beginning of the school year with higher education costs. The effect of the flood is unlikely to be visible in these data. As a result, we believe that core inflation will rise above 4% yoy from August's 3.7% yoy this year nor for the vast majority, if not all of next year,” say Santander Bank economists.

“In recent statements, MPC members have strongly focused attention on next year's March meeting as the moment when the first interest rate cut could be considered, while at the same time distancing themselves from the idea of ​​​​such a move this year. This was a motif so common in their statements that it may be may influence the shape of the message, which usually repeats previous formulations,” they added.

The President of the National Bank of Poland, Adam Glapiński, announced at a press conference in September that it was time interest rate cuts it may occur around mid-2025, and in an optimistic scenario even earlier. He added that this would not be an announcement of a cycle of reductions.

On Friday, the NBP will publish a description of the discussion from the MPC meeting in September. The MPC's minutes since the coronavirus pandemic are usually of a historical nature and do not bring substantially new information to the current discourse on the Council's activities.

In the background, in the context of the central bank, the Committee for Constitutional Responsibility will deliberate on the preliminary motion to bring the president of the NBP before the State Tribunal. On Wednesday at 10.00 the commission intends to hear the first 5 witnesses in the proceedings – these will include, among others: long-time BGK managers from the treasury department. In total, the commission intends to interview over 60 people according to the preliminary schedule. The President of the NBP is to be one of the last to be questioned.

On Tuesday, the September PMI from the Polish industry will be published, which may confirm the weak economic situation in the sector.

“The domestic industry continues to struggle given fragile external demand, especially weak conditions in the German automotive sector. We expect the Polish PMI to fall to 47.2 from 47.8 in August, given the corresponding decline in the German index. New orders and current production remain at a low level,” ING economists say.

Several economic congresses with the participation of government representatives will be held during the week. The two-day Warsaw Security Forum and the climate and energy PRECOP 2024 in Katowice will start on Tuesday. The EKF Ubezpiecznia 2024 conference will be held on Wednesday and Thursday.