CEE: Employment growth in the region

On the radar

• Trade balance in Romania landed at EUR -3.14 billion in April.
• At 9 AM CET Slovakia will publish industrial output growth in April, while Czechia final inflation number in May.
• At 10.30 AM CET Slovenia will release industrial output growth in April.
• Hungary will give information about year-to-date budget performance at 11 AM CET.

Economic developments

In the first quarter of 2025, the number of employed persons increased by 0.7% year-on-year (y/y), corresponding to a quarter-on-quarter (q/q) growth of 0.2% in the euro area (seasonally adjusted figures). In the EU, employment growth in terms of persons was 0.4% y/y and stagnated in q/q terms in the first quarter of 2025. Looking across countries, Croatia experienced one of the highest employment growth rates in the entire EU (2.9% y/y and 1% q/q). Czechia and Hungary were the other two CEE countries that saw employment growth in persons in the first quarter of 2025 in annual terms (1.1% y/y and 0.3% y/y, respectively). However, in Hungary, employment stagnated compared to the fourth quarter of 2024. In the rest of the region, employment growth declined—most notably in Romania and Poland. In Romania, employment dropped by 4.4% y/y and 2.1% q/q. Furthermore, unemployment rates ticked up in both Romania and Poland. All in all, however, labor market conditions remain relatively tight.

Market movements

CEE currencies strengthened slightly against the euro at the beginning of the week. Fitch Ratings reaffirmed Hungary’s sovereign debt rating at 'BBB' with a stable outlook but significantly cut its 2025 GDP growth projection to just 0.7%. This forecast is only marginally below our expectation of 0.8% growth in 2025. As for other news, the central bank of Serbia is holding a rate-setting meeting this week. We expect the decision to be a close call between maintaining the current rate and implementing a rate cut.

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