Room for improvement in CEE’s digital competitiveness
|On the radar
- Czech central bank kept the policy rate unchanged at 3.50%
- Retail sales in Romania declined by -1.9% y/y while in Hungary it grew by 3.0% y/y and in Slovakia by 1.4% y/y in September.
- Industrial output declined in Hungary in September by -1.9% y/y (WDA) while in Czechia it grew 3.6% y/y (NSA).
Economic developments
The recently published IMD World Digital Competitiveness Ranking 2025 measure countries’ ability to use digital technologies as a key driver of economic transformation. Switzerland, the United States, and Singapore secured the three top positions, while CEE countries appear further down the list. Austria ranked at 24th place, marking a one-position improvement from last year. IMD highlighted the “Knowledge” subcategory, putting Austria’s strong teaching and scientific capabilities among the global leaders. Other CEE countries were placed in the lower half of the 69-country ranking: Czechia fell three spots to 35th, and Slovenia ranked 41st. Poland, Hungary, and Romania followed consecutively between 45th and 47th; Poland recorded a significant six-position drop, Romania remained stable, and Hungary improved by seven positions. Towards the bottom, Croatia (52nd) and Slovakia (57th) both declined compared to last year. The main challenge for these two countries lies in “Future Readiness,” reflecting limited business agility and adaptability.
Market movements
Czech central bank kept the policy rate unchanged at 3.50% and reiterated that domestic inflationary pressures remain elevated not allowing for rate cuts. From the perspective of achieving the inflation target, it is still necessary to maintain tight monetary policy. We continue to expect rate stability until around mid-2027, followed by a reduction. Poland’s central bank Governor Glapinski called the monetary easing in Poland in 2025 substantial. Further he stated that another small interest rate cut is possible, but the timing is uncertain and data dependent. All three CEE currencies have strengthened against the euro this week, while the long-term yields have been relatively stable. Romania sold 2028 and 2034 government papers that were priced to yield 6.76% and 6.88% respectively.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.