Polish Zloty: Fiscal slippage and cautious NBP weigh – Commerzbank
Commerzbank’s Tatha Ghose highlights that recent Polish fiscal and monetary developments are negative for the Polish Zloty.
Commerzbank's analyst Tatha Ghose points out that recent fiscal and monetary developments in Poland are unfavorable for the Polish Zloty. The government has set a 2027 fiscal deficit ceiling of PLN 282.6bn, which translates to a 7.1% deficit of GDP (up from the 6.8% target in 2026). This fiscal consolidation is not significantly better than the 7.3% deficit in 2025.
President Nawrocki's vetoes have impeded revenue measures, further complicating the situation. The National Bank of Poland (NBP) has taken a cautious approach to monetary policy, citing uncertainties over the Middle East, fiscal policy, the European Union's Sustainable Finance Tax (ETS2), and droughts as reasons for not raising interest rates. Consequently, the Zloty's risk premium against other CE3 currencies has increased.
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