CEE: Improved export momentum, but incomplete recovery

On the radar

• At 8.30 AM CET Hungary releases industrial output growth in July.
• Czechia follows with the same release at 9 AM CET. Czechia will also publish trade data.
• Serbia will show producer prices growth at noon CET.

Economic developments

Last month, we were commenting on exports performance in 2Q26 one year after global trade was disrupted by the introduction of U.S tariffs that seems solid. In 2Q26, all CEE countries accelerated the annual growth of exports to the rest of the world compared with 1Q26. Today, we take a different angle as the rebound in growth rates should be viewed against a weaker underlying trend. The decline of the value of CEE8 exports to world lasted throughout the second and third quarter of last year and bottomed out in 3Q25. The recovery of exports growth was rather meager, however. The total value of CEE8 exports remains below the trend trajectory seen before the recent global trade disruptions. All in all, 2Q26 data point to improving export momentum, but not yet to a full recovery of the export volumes lost relative to the previous trend.

Market movements

This week, there is ECB meeting and the ECB is expected to raise its key interest rates by 25 basis points (inflation risks and economic resilience). In the region, Poland and Serbia have the interest rate meetings scheduled. We expect stability of rates. As far as currency market is concerned, The Polish zloty and the Hungarian forint strengthened against the euro last week. In Czechia, we have seen the currency slightly weakening against the euro. We attribute the divergence between Hungary and Czechia to monetary policy outlook. In CEE bond markets last week, we saw mixed developments. Hungarian yields declined sharply in the second half of the week, which could be partly associated with the fact that the Hungarian central bank is preparing to lower its inflation target. As for other news, Slovakia’s Prime Minister Fico signaled a possible change regarding scrapping the financial transaction tax that was heavily criticized when introduced last year. In Czechia, Prime Minister Andrej Babis said that a priority of the 2027 state budget plans is ramping up investments. The government will start consolidating public finances in subsequent years.

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