Key Moments
- Commerzbank’s Tatha Ghose points to recent fiscal and monetary shifts in Poland as negative for the Polish Zloty.
- The government’s 2027 deficit ceiling of PLN 282.6bn, or 7.1% of GDP, shows limited improvement from the 7.3% deficit projected for 2025.
- The National Bank of Poland is described as remaining cautious rather than hawkish, keeping the Zloty’s risk premium elevated versus other CE3 currencies.
Fiscal Stance and Political Tensions Weigh on the Zloty
Commerzbank analyst Tatha Ghose notes that recent fiscal decisions and political dynamics in Poland are undermining support for the Polish Zloty. The combination of a higher fiscal deficit path, political frictions, and firm underlying inflation is seen as offering little evidence of fiscal consolidation.
According to Ghose, the government has set a fiscal deficit ceiling for 2027 at PLN 282.6bn, compared with the PLN 271.7bn target for 2026. This corresponds to a deficit of 7.1% of GDP, versus an original target of 6.8%, and is described as not being meaningfully better than the 7.3% of GDP projected for 2025.
President Nawrocki’s vetoes of certain revenue-side measures are highlighted as a further drag on consolidation efforts, adding to concerns around fiscal discipline and Poland’s budget trajectory.
| Year | Deficit Target (PLN bn) | Deficit as % of GDP |
|---|---|---|
| 2025 | – | 7.3% |
| 2026 | 271.7 | 6.8% (original target) |
| 2027 | 282.6 | 7.1% |
Ghose emphasizes that these fiscal decisions are occurring alongside an intensifying confrontation between the president and the government in the run-up to next year’s election. This escalation is described as directly feeding into a higher risk premium for the Zloty.
NBP’s Cautious Posture and Inflation Dynamics
On the monetary side, Ghose underlines that the National Bank of Poland is not shifting toward a decisively hawkish stance, despite a sharper pickup in underlying inflation compared with other CE3 currencies.
As summarized from the July Monetary Policy Council (MPC) minutes, Poland’s National Bank (NBP) kept rates unchanged due to uncertainties related to:
- the Middle East,
- fiscal policy,
- ETS2, and
- droughts.
Ghose remarks that the Polish inflation acceleration is outpacing that of its regional peers and moving faster than the pace at which the NBP and Adam Glapinski are prepared to become hawkish. This stance is described as leaving the central bank at best in a cautious posture.
Combined Impact on Zloty Risk Premium
Ghose concludes that both the fiscal and monetary backdrops are detrimental for the Zloty. The fiscal trajectory and the conflict between the government and the president are said to raise the currency’s risk premium for “obvious risk-premium reasons,” while the NBP’s reluctance to adopt a more hawkish tone is seen as another negative factor.
Finance Minister Andrzej Domanski is cited as arguing that the fiscal outcome is only “slightly” worse, attributing this mainly to negative shocks such as fuel tax cuts, the absence of VAT on SAFE payments, and the Middle East shock. However, Ghose stresses that “the broader point is simple: there is hardly any consolidation despite another year of relative macroeconomic calm.”
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