CEE labour productivity gains persist despite some exceptions

Erste Bank Research Team Erste Bank

On the radar

In Poland, MPC left interest rates unchanged at 3.75 %.
Slovakia’s industrial production growth figure in July accelerated to 2.4% y/y from 2.1%.
Romania’s trade deficit for July landed at EUR 2.82bn.
Today, Slovenia’s July industrial production is due at 10:30 CET.
Croatia’s industrial producer prices will be published at 11:00 CET relevant for the month of August.
Today, Serbia’s central bank is expected to keep the key policy rate unchanged at 5.75%.

Economic developments

Labour productivity growth remained stronger in CEE than the EU average in 2Q26. Real labour productivity per hour worked increased by around 1.7% y/y across the CEE8, compared with 0.8% in the EU, maintaining the substantial gap observed since the start of 2025. Looking at individual countries, Slovenia recorded the strongest increase in the EU in the second quarter of 2026, with productivity per hour worked rising by 5.8% y/y. At the other end of the EU distribution, productivity declined by 1.2% in Romania and 0.8% in Czechia. It can still be concluded from the latest figures that productivity gains continue to provide some support to the region’s growth performance, although the divergent picture at the country level is pointing to differing developments in output and labour utilisation across CEE region.

Market movements

The Polish MPC left the reference rate unchanged at 3.75% in September, in line with expectations, with the statement offering little indication of a near-term change in policy. Today, the zloty is 0.1% weaker against the euro, while the Polish 10Y yield is 4bp higher. Domestic fiscal risks remain in focus after Finance Minister Domański warned that presidential vetoes of planned tax changes could lower 2027 revenues by PLN 10-15bn, while retail bond sales eased to PLN 8.24bn in August. Elsewhere in FX, the forint is 0.3% weaker against the euro today but remains 0.8% stronger over the week, while the Romanian leu is broadly unchanged. In Romania, delays identified in several REPowerEU projects continue to underline implementation risks around EU-funded investment.

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Erste Bank Research Team

Erste Bank

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