Poland’s industrial output rose 7.4% year on year (y/y) in constant prices in September, an unexpectedly sharp increase from a surprise gain of 0.7% y/y gain in August, unadjusted data from the statistics office GUS showed on October 20.

The reading was also well above the consensus, which expected a gain of 5.2% y/y in September. “The growth of industrial output in recent quarters has been rather volatile, which makes us cautious about interpreting the September rebound as a sign of lasting improvement,” Santander Bank Polska said in a note.

“It is worth noting, however, that this marks the third consecutive positive surprise. Our 2025 production growth forecast of around 2% may need to be revised upward if the next reading does not show a sharp decline offsetting the impact of the September figures,” Santander Bank Polska also said.

Seasonally adjusted, output rose 5.7% y/y in September after a 1.5% y/y increase the month before, GUS data showed.

In unadjusted monthly terms, output dropped 7.1% in September after a revised 0.4% m/m rise in August. Seasonally adjusted, production increased 4.1% m/m, following a 0.1% m/m slide the preceding month.

In September, 24 of the 34 industrial divisions recorded annual output increases, compared to 17 in the preceding month, GUS data also showed.

Manufacturing output in September grew 8.2% y/y, compared with a gain of 1.1% y/y in August. Mining and quarrying retreated 1.5% y/y, after falling a revised 2% y/y the preceding month.

Meanwhile, utility sector production declined 3.6% y/y in September, following a drop of 6.7% y/y in August. Water supply and waste management grew 6.3% y/y, compared with a 1.5% y/y growth the preceding month.

If anything, the data point to the Nationl Bank of Poland approaching its next interest rate decisions with caution, analysts say.

“Robust growth in manufacturing activity and elevated wage increases in that sector may prompt the NBP to refrain from another interest rate cut in November while waiting for further economic data,” ING said in a note.

At the same time, weakening wage pressures in services and [still] poor prospects for industry leave room for additional monetary easing in the future, analysts also say.

“We expect the NBP’s benchmark rate to remain unchanged through the end of 2025, with the Council lowering it by a further 50bp to 4% by the end of 2026,” ING said.

The NBP last cut its reference rate by 25bp to 4.5% in October, a fourth reduction since May. Easing of the NBP’s monetary policy is seen as important to boosting economic growth.

Poland’s GDP grew just 0.1% in 2023 and 2.9% in 2024. A stronger 3-3.5% expansion is forecast for 2025, though geopolitical risks and turbulence in world trade remain a threat to the outlook.