Poland’s industrial production contracted 1% year on year at constant prices in January (chart), after a gain of 0.2% y/y the preceding month, unadjusted data from the statistical office GUS showed on February 22.

Despite the fall, analysts see the reading as positive, as most sectors recorded y/y growth in January – even if not to the extent of turning in overall expansion. Seasonally adjusted data point to an overall gain y/y in the first month, analysts also point out. The calendar effect was also a factor, as January 2025 had one working day fewer than January 2024.

"Seasonally adjusted data suggest that the industry began the year in relatively solid shape and should contribute to the economy's recovery," Bank Millennium said in a comment on the GUS release.

Seasonally adjusted data show that output increased 0.3% y/y in January, following a contraction of 0.6% y/y the preceding month.

In unadjusted monthly terms, industrial production expanded 2.3% in January after a revised fall of -7.9% month on month in December, GUS also said. Seasonally adjusted, output grew 0.5% m/m after falling 1.1% m/m the preceding month. 

Broken down by the main segments and in unadjusted terms, output decreased by 0.9% y/y in January in manufacturing following a fall of -0.1% y/y in December. 

Output in the utility sector declined 2.8% y/y in January after a revised increase of 2.8% y/y the preceding month. 

In water supply and waste management, production also eased expansion to 3% y/y in January after adding 3.8% y/y in December.

Production declined 4.8% y/y in mining and quarrying in January, after growing a revised 3.1% y/y in December, GUS data also showed.

Overall, production expanded in 20 of 34 industrial segments in January in y/y terms, the same ratio as in the preceding month.

The new data does not alter the outlook for monetary policy, analysts say. Expected economic recovery and still elevated wage pressures support the scenario of stable interest rates in the coming months.

“Our baseline scenario remains to keep rates unchanged in the first half of this year. We see room for rate cuts in the second half of the year, but not exceeding 100 basis points,” Bank Millennium said.

The NBP cut its reference interest rate by a combined 100bp to 5.75% in September and October 2023. The central bank is expected to begin monetary easing in mid-2025 at the earliest.