CEE car registrations up by double digits in July

On the radar

• 2Q25 GDP was revised up to 2.6% y/y in Czechia.
• August’s flash inflation eased in Poland to 2.8% y/y while in Slovenia flash inflation went up to 3.0% y/y.
• Retail trade in Croatia grew 1.4% y/y in July, while in Serbia in increased by 1.9% y/y in July.
• In Serbia, industrial output grew 5.5% y/y in July and trade deficit was at EUR 787.6 million.
• Today in the morning, manufacturing PMIs will be published across the region (in Romania it arrived at 49.3 in August).
• Romania unemployment rate landed at 5.8% in July, while in Hungary producer prices increased by 4.5% y/y in July.
• At 10 AM CET Poland will publish 2Q25 GDP structure while Serbia at noon CET.

Economic developments

Although car registrations in the EU for July increased by 7.4% y/y, since the beginning of the year (Jan-Jul 2025) new EU car registrations fell by 0.7% compared to the same period last year. In the region, the new car registrations grew very dynamically in July as in all CEE countries the growth dynamics was in double digits (between 12.3% in Croatia to as much as 26.8% in Hungary). In year-to-date terms the new car registrations also increased in most CEE countries. There are two exceptions only: Slovakia and Romania. In Slovakia decline of new car registrations is rather marginal (-0.7% y/y between January and July), while in Romania performance is much weaker. New car registrations fell by almost 16% y/y in that period.

Market movements

This week, Poland’s central bank holds a rate setting meeting and the interest rate decision will be announced on Wednesday. Another cut is likely as inflation surprised to the downside and eased to 2.8% y/y in August according to flash estimate. Such development supports monetary easing scenario at the upcoming meeting. Apart from Poland that plans to increase defense spending in 2026, Czechia announced higher budget deficit in 2026 driven by additional defense expenditure. In Romania, the budget gap between January and July stood around 4% of GDP and is expected close to 8% of GDP in the whole 2025. . As for global developments, so far, the reaction on the CEE FX and bond market has been muted to the federal appeals court ruling that tariffs were issued illegally.

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