Polish slowdown coming to an end

The turnaround in the latest Polish data suggests that weak GDP growth in Q4 could mark the trough of the economic slowdown. This will no doubt lead to speculation that the National Bank’s easing cycle could come to a halt. For our part, we think the fact that growth is still sluggish and inflation is below-target means that further interest rate cuts are likely. We have pencilled in a 25bp cut next week to 3.50% and expect a further fall in rates thereafter.