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The National Bank of Poland has adjusted its hawkish stance as inflation has decreased, with expectations for headline inflation to return to acceptable levels by July 2025, a year earlier than previously forecasted. In the first quarter of 2025, CPI inflation averaged 4.9% YoY, lower than the NBP's March projection, aided by slowing wage growth and anticipated lower electricity tariffs. Inflation is expected to moderate throughout the year, with projections indicating a decline to around 3% in the second half of 2025.
UBS has revised its outlook for the Polish zloty, anticipating gains due to increased German defense and infrastructure spending, alongside potential benefits from a ceasefire in Ukraine. The firm has adjusted its USD/PLN exchange rate forecasts, projecting a stronger zloty against the dollar, with new end-of-quarter rates reflecting a more favorable medium-term outlook for the European economy. However, risks such as high tariffs and geopolitical tensions could impact this trajectory.
UBS has revised its forecast for the Polish zloty, citing Germany's increased defense and infrastructure spending and the potential for a ceasefire in Ukraine as positive factors for European growth. The updated USD/PLN exchange rate predictions for Q2 2025 to Q1 2026 are now 3.96, 3.89, 3.80, and 3.71, reflecting a more favorable outlook for the zloty. However, risks such as high tariffs and renewed US economic strength could impact this trend.
UBS predicts gold prices will rise to $3,200 per ounce within the next year, driven by escalating global trade conflicts and monetary policy uncertainties. The price has already reached a record high of $3,004.94, up 14% this year, with strong demand from gold-backed ETFs, central banks, and individual investors. Other banks, like Macquarie Group and BNP Paribas, are even more optimistic, forecasting prices could exceed $3,500.
BNP Paribas Bank Polska is set to increase its dividend to PLN7.86 on May 9, marking a 130% rise from last year's PLN3.41, with a yield around the industry average of 3.2%. Despite this being the company's first dividend payment, it shows a sustainable payout ratio of 34%, with earnings per share expected to grow by 0.6% over the next three years. However, the company lacks a long payment history, which may deter income-focused investors.
Gold has surpassed $3000 an ounce for the first time, driven by rising geopolitical tensions and persistent inflation concerns. Major banks like Goldman Sachs and UBS have raised their price targets, reflecting strong institutional demand, particularly from central banks, including China and India. However, potential risks such as overvaluation and shifts in Federal Reserve policy could impact gold's bullish outlook.
Investors are eyeing dividend stocks for steady income amid economic uncertainties, with notable options including Wuliangye Yibin Ltd (4.08% yield) and Padma Oil (7.55% yield). Bolsa Mexicana de Valores offers a compelling 6.31% yield, supported by stable earnings growth and a strong payout ratio, while St. Galler Kantonalbank AG provides a reliable 4.1% yield with low bad loan allowances.
The banking markets in Central and South Eastern Europe (CE/SEE) are thriving, with a return on equity averaging 15-20% in 2024, significantly outperforming the eurozone. The region's economic resilience, low unemployment, and higher interest rates contribute to strong profitability, attracting interest from major banks and potential consolidation opportunities. Despite challenges, the CE/SEE banking sector is positioned as a lucrative market, particularly in Poland and Romania.
UBS has raised its USD/PLN forecast, predicting an increase to 4.35 by Q1 2025, influenced by potential challenges from Donald Trump's second presidency and contrasting economic data from the US and Europe. Poland's GDP growth is expected to reach 3.5% in 2025, supported by EU funds, while the upcoming presidential election could significantly impact the zloty, depending on the outcome. The Federal Reserve's rate decisions and US trade policies may also affect the dollar's strength in the near future.
UBS has raised its USD/PLN forecast, anticipating a rise to 4.35 in Q1 2025 due to potential challenges from a possible second Trump presidency, strong US economic data, and weak European figures. Poland's GDP growth is projected at 3% in 2024, accelerating to 3.5% in 2025, supported by EU funding, while the budget deficit remains a concern. The outcome of the upcoming presidential election could significantly impact the zloty, with differing implications based on the candidates' success.
Polish Złoty
Currency
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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