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Polish Zloty firms as Poland’s fiscal plan lifts bond yields

Societe Generale said August inflation and a revised-up second quarter GDP, along with a draft 2027 deficit of 7.1% of GDP, pushed 10-year Polish government bond yields above 6.0% for the first time since January 2025.

Reported · Written up by our desk · Major Pairs

Societe Generale said the Polish zloty strengthened while Polish domestic bonds sold off after August inflation and revised GDP data beat expectations and the government unveiled its 2027 budget draft.

The bank cited headline inflation rising to a 14-month high of 3.4% in August from 3.0% in July, and a second-quarter GDP revision up by 0.1 percentage point to 1.0% quarter over quarter, or 3.9% year over year.

Societe Generale also pointed to a tax overhaul in the draft that shifts burden toward corporates, alongside concerns that fiscal risks could raise ratings downgrade risk and borrowing costs, even as recent macro data supported EUR/PLN and POLGB yields.

According to FXStreet, EUR/PLN retreated below 4.33 from near 4.35, while the 10-year POLGB yield moved above 6.0% for the first time since January 2025.

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