CEE: Croatia and Czechia publish 3Q25 GDP details
|Croatia and Czechia will be in the spotlight due to the release of 3Q25 GDP data, including its structure. In Czechia, we already know the flash estimate of 3Q25 GDP growth, while in Croatia we will see 3Q25 economic developments for the first time. Furthermore, Poland will publish October’s industrial output and retail sales growth. At the end of the week, November’s flash inflation will be released and is expected to ease further in Poland. Performance of the industry and retail sectors in October will also be published for Croatia, Serbia, and Slovenia. Slovenia will additionally release November’s inflation. Lastly, some labor market data will be published, such as wage growth (Hungary, Serbia, and Poland), unemployment rates (Hungary and Poland), and producer price developments (Hungary, Poland, and Slovakia). On Friday, after market close, Moody’s is scheduled to review Hungary’s rating and outlook. No change is expected, as rating agencies are likely in a wait-and-see mode ahead of the parliamentary election scheduled for spring 2026.
FX market developments
While the Hungarian forint remained strong against the euro after the Hungarian central bank kept the policy rate unchanged at 6.5% and maintained a hawkish tone, the Czech koruna and the Polish zloty weakened toward the end of the week. We attribute this development to global data releases, particularly U.S. labor market data and the unemployment rate rising toward 4.4%. Regarding the outlook for the Hungarian forint, we discuss it in detail in our latest Hungary Special Report A new approach of the monetary policy. In short, the forint is expected to trade sideways around current levels in 2026, while under favorable conditions, a stronger currency could contribute to disinflation through the expectations channel.
Bond market developments
Last week, developments in the bond market were mixed. In some countries, long-term yields inched higher (Hungary, Poland), while in others (Romania) they declined slightly. Furthermore, Hungarian long-term yields returned above 7%. The spread against Romanian 10Y yields turned positive after almost two years in negative territory (i.e., with Romania’s yields above Hungary’s). Romania sold RON 447.76 million of 2040 government paper, priced to yield 6.97% at the beginning of the week. It also sold RON 500 million of 2030 bonds, with solid demand reflected in a bid-to-cover ratio above 2. Czechia placed T-Bills on the market. Finally, Slovakia sold a broad range of government papers maturing between 2028 and 2047 amid solid demand and has completed its 2025 financing needs. In other news, Hungary’s government may be negotiating a loan facility led by Citigroup as part of its “financial shield” reportedly coming from the U.S. The European Commission has positively assessed Poland's revised National Recovery Plan, which now totals EUR 54.7 billion after a reduction in the loan portion. The EC has also approved payment of the fourth and fifth tranches, amounting to approximately PLN 26 billion, expected to arrive in early December.
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