NBP Projection: Inflation sharply up in 2027. Implementation of ETS 2 threatens a spike.

The National Bank of Poland has significantly revised its inflation forecast for 2027, now expecting an average inflation rate of 4.2% year-on-year. This is a notable increase from the previous estimate of 2.7%. Key drivers of inflation will include food and energy prices, with food inflation projected to peak at 4.6% in Q3 2027. The bank also warns that the EU's emissions trading system could raise inflation by up to 2 percentage points. Economic growth is expected to slow, with GDP growth forecasted at 2.8% for 2027. Investment dynamics are predicted to drop sharply to 1.5% in 2027, following a peak in EU fund absorption. The labor market remains stable, with unemployment projected at 3.3-3.4%.