Poland’s annual inflation slowed to 3.5% in October, reaching the upper limit of the central bank’s target range ahead of a policy meeting as temporary fuel tax relief complicates the rate outlook.
Statistics Poland’s preliminary estimate showed consumer prices fell 0.4% from September on an unadjusted basis. Annual inflation was 4.1% in September. Narodowy Bank Polski, Poland’s central bank, targets 2.5% inflation and allows a range from 1.5% to 3.5%.
The government reduced value-added tax on specified fuels from 23% to 8% starting Oct. 3. It also cut excise duties by 29 groszy per liter of gasoline and 28 groszy per liter of diesel. The measures are scheduled to expire Dec. 31, the Finance Ministry said.
ING said fuel prices fell 9.7% from September. The ministry describes the program as its third round of fuel-price relief in 2026. The government says drivers, households and businesses benefit, and a tax on fuel companies’ extraordinary profits is intended to help fund the measures.
Commerzbank analyst Tatha Ghose expects the lower inflation reading to delay interest rate increases, according to comments carried by FXStreet. Ghose cautioned that temporary fuel tax relief makes the headline rate a weak guide to lasting price pressure.
ING senior economist for Poland Adam Antoniak estimated that inflation excluding food and energy fell below 3% in October. ING expects the central bank to keep rates unchanged through year-end, followed by two 25-basis-point increases in the first quarter of 2027. Those are the bank’s forecasts, not policy decisions.
ING’s post-release analysis says it forecast 3.8% inflation for October, compared with a 3.7% consensus.
The central bank’s Monetary Policy Council is scheduled to meet Nov. 3-4, with the fuel tax reductions set to expire Dec. 31.
