According to Borys, as disinflation is faster than forecast earlier, interest rate cuts are "almost certain' this year.
Radek Pietruszka/PAP

Interest rate will “almost certainly” go down this year, the head of the state-run Polish Development Fund (PFR) Group has said.

Referring to the recent CPI data, Paweł Borys wrote on Twitter on Monday that July’s inflation drop “means that prices have gone down in Poland.”

The Central Statistical Office (GUS) reported in a flash estimate earlier on Monday that prices of consumer goods and services (Consumer Price Index, CPI) increased by 10.8 percent year on year and fell by 0.2 percent month on month in July 2023.

According to Borys, as disinflation is faster than forecast earlier, interest rate cuts are “almost certain’ this year.

Borys added that interest rates were expected to drop to 5.5 percent within the coming six months and to around 4.5 percent by the end of 2024.

“In 2024, loan payments will go down significantly,” he said.

In July, the Monetary Policy Council (RPP), the Polish central bank’s rate-setting body, left interest rates unchanged.

Following this decision, the reference interest rate remained unchanged at 6.75 percent, the lombard rate at 7.25 percent, the rediscount rate at 6.80 percent, and the discount rate at 6.85 percent. The RPP also left the deposit rate unchanged at 6.25 percent.