CEE growth looks inward

On the radar

• In Romania, GDP contracted by 0.4% y/y in 2Q26 and we revise the 2026 GDP growth toward -0.7%.
• In Hungary, industrial output rose by 4.7% y//y in July, while in Czechia industry (NSA) stagnated in July.
• Trade deficit in Czechia reached CZK -8.5 bn.
• Producer prices in Serbia rose by 8.4% y/y.
• Today, Hungary will release inflation rate in August at 8.30 AM CET.
• Slovakia and Croatia will publish trade data for July and June, respectively.
• Czechia will show share of unemployed in August.

Economic developments

We finally know the growth structure in all CEE countries. The 2Q26 data suggest that CEE growth is still primarily a domestic story rather than an export-led development. Resilient labor markets and real wage growth are supporting household consumption, which increased in all CEE countries except Romania in the first half of the year. Although growth dynamics mostly slowed in 2Q26, private consumption remains one of the key factors driving growth. Investment is increasingly supporting growth in Poland, Czechia, Slovenia and Serbia, backed by EU funds, infrastructure spending and construction. Furthermore, strong investment, particularly supported by EU funds, was the only positive driver of growth in Romania, while consumption, services and industry contributed negatively amid persistent inflation and weak real wage growth. By contrast, investment activity declined in Hungary and Slovakia in the first half of the year.

Market movements

Today, Poland’s central bank begins its rate-setting meeting, with the interest rate decision due on Wednesday. We expect the Polish central bank to keep interest rates unchanged. In our view, Governor Glapiński's July suggestion that he might submit a motion for a rate cut after the summer has become outdated, given renewed increases in oil and gas prices and the rebound in domestic inflation. Furthermore, Hungary could unlock up to EUR 4.2 billion of blocked cohesion funds within weeks and a further EUR 2.2 billion in October. Poland received final approval for the disbursement of EUR 7.9 billion under its RRF payment request, and Warsaw plans to file its final request, worth EUR 12.7 billion, by the end of September. Finally, in Serbia, the government, at an extraordinary session, adopted a proposal asking President Vučić to dissolve the National Assembly and call snap parliamentary elections, marking the first formal step toward an early vote.

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