CEE central banks maintain a high degree of independence

Erste Bank Research Team Erste Bank

On the radar

2Q25 GDP in Croatia accelerated to 3.4% y/y from 2.9% y/y in 1Q25.
In Hungary, average grows wage increased by 9.7% y/y in June.
Today at 8.30 AM CET, Hungary will publish unemployment rate.

At 10.30 AM CET, Slovenia will release retail sales growth in July.

Economic developments

US President Donald Trump dismissed Federal Reserve Governor Lisa Cook from her post and made no secret of his desire to actively take control of the US Federal Reserve, as evidenced by numerous verbal attacks on Fed Chairman Jerome Powell and vehement demands for lower key interest rates. Amid the emerging attacks, we look at the Central Bank Independence indices of de jure central bank independence as of 2023. We follow the CBIE index calculations from Romelli (2022, 2024). The 2024 update reveals a continued global trend towards enhancing central bank independence. Despite the challenges which followed the 2008 financial crisis and the recent re-emergence of political scrutiny on central banks following the COVID-19 pandemic, Romelli finds no halt in the momentum of central bank reforms. Within the region, Croatia, Slovakia and Slovenia fall under the jurisdiction of European Central Bank that scores 0.9 (the index takes values from 0 to 1) suggesting high level of independence. The banks in the region follow with Poland’s central bank having the highest score of 0.85, Romania’s and Czechia’s central banks with a score of 0.8 and Hungarian central bank with a score of 0.66. Serbia’s central bank is not evaluated.

Market movements

The CEE currencies reversed the strengthening trend on Wednesday and EURPLN moved up toward 4.27, for example. Czechia sold the government papers maturing in 2031, 2034 and 2044 amid strong demand from investors’ side, while Hungary placed T-Bills on the market. Today, Romania’s Prime Minister Bolojan is expected to present the details of a second set of reforms aimed at trimming the European Union’s widest budget deficit. Poland’s Prime Minister Tusk announced further increase of defense spending in 2026 that should amount to roughly PLN 200 billion as opposed to PLN 186.6 planned in 2025. As for monetary policy in Poland, the central banker Wnorowski said he sees a space for 25 basis points cut at the upcoming central bank meeting in September.

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Erste Bank Research Team

Erste Bank

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