Poland likely to be moderately affected by US tariffs; 3.7 pct GDP growth still possible (interview)

"Poland's trade with the US is limited, but weaker European demand, especially in the automotive sector, could affect Polish exports of car parts. However, fiscal stimulus in Europe, particularly Germany's large package, will support recovery," Filipowicz-Rybicka explained.

She stressed that while tariffs may negatively affect global demand, they are unlikely to significantly disrupt Europe's economic rebound.

Alior Bank's baseline scenario projects GDP growth of 3.7 percent in 2025 and 3.6 percent in 2026. However, Filipowicz-Rybicka pointed out heightened uncertainty surrounding these forecasts due to potential retaliatory tariffs and broader trade conflicts.

At the same time, she pointed to her expectations of the CPI inflation to fall within Poland's national bank NBP target deviations in the second half of the year, opening the door for interest rate cuts.

Alior Bank forecasts that Poland's Monetary Policy Council will cut interest rates by 75 basis points by the end of the year, however, following the 'dovish' turn of Poland's central bank NBP governor, risks are tilted towards stronger cuts.

"Recent projections suggest inflation will average 4.1 percent this year, with CPI dropping to around 3.4 percent in the second half of the year. This creates room for rate cuts, likely starting in early second half of 2025, though earlier reductions are possible following the dovish shift by the NBP governor," Filipowicz-Rybicka assessed.

She added that external factors, such as deeper rate cuts abroad, could expand Poland's scope for similar moves.

Alior Bank's baseline scenario anticipates a gradual decline in inflation below 3 percent by late 2026 and a reference rate target of 3.5 percent in subsequent years.

However, risks tied to domestic recovery and persistent inflation momentum may influence the pace of monetary easing.

pat/ nl/ ao/