CEE: Economic sentiment indicator in 2Q26

Erste Bank Research Team Erste Bank

On the radar

Today, manufacturing PMIs will be released in Czechia, Hungary, Poland and in Romania.
Croatia will publish flash inflation in June, unemployment rate and real wage growth.
Inflation eased in Poland toward 2.5% y/y in June, while in Slovenia it remained stable at 3.6% y/y in June.
June’s retail sales grew by 0.5% y/y in Croatia and by 6.2% y/y in Serbia. Industrial output in Croatia declined by -1.1% y/y while in Sebria it increased by 0.3% y/y.
In Seria trade deficit reached EUR -617 million in May, while Hungary posted EUR 500 million surplus.
In Hungary producer prices declined by -1.7% y/y

Economic developments

This morning, Manufacturing PMIs are due to be released across the CEE region, namely in Czechia, Hungary, Poland, and Romania. The flash Composite PMI for the eurozone points to a slight improvement in market sentiment in June should be expected in CEE. By contrast, the Economic Sentiment Indicator, another gauge of sentiment in the region, suggests a modest weakening of the average CEE8 ESI. Developments across countries have been quite heterogeneous, however. Croatia, Hungary, and Poland recorded a slight improvement in market sentiment in June, while Czechia, Romania, and Serbia saw a deterioration. In Romania in particular, sentiment weakened more visibly amid political uncertainty and instability, which may weigh on business plans and investment activity. Looking beyond local factors, however, we expect that conflict resolution in the Middle East and lower commodity prices could support confidence and improve growth prospects..

Market movements

CEE currencies have weakened since the beginning of the week, with EURCZK at 24.26, EURHUF touching 356, and EURPLN moving toward 4.30. Long-term yields continue to decline. In Czechia, central banker Zamrazilova underlined that the latest rate hike by the Czech National Bank should be seen as fine-tuning rather than the beginning of monetary tightening. In Poland, we are observing a shift toward monetary easing, as inflation surprised to the downside, arriving at 2.5% y/y. At the upcoming meeting, due next week, rate stability remains the most likely scenario. In Romania, President Dan announced that a majority deal is a condition for the nomination of a new Prime Minister. The timing of the new government is therefore uncertain.

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Erste Bank Research Team

Erste Bank

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