CEE: Long-term trends in car registrations

On the radar

• Romania’s central bank left the key policy rate unchanged at.6.5%.
• Industrial output grew by 2.0% y/y in Slovakia in June and by 1.7% y/y in Slovenia.
• Share of unemployed increased to 5.0% y/y in Czechia in June.
• Today, Czechia will release details on July’s inflation at 9 AM CET.

Economic developments

Today, we look at the long-term trends in car registrations as Eurostat published annual data on passengers’ cars. In 2025. Almost 11 million cars were registered in the EU27, that is just marginally higher compared to the previous years. Looking back, however, car registrations expanded steadily between 2015 and 2019, with the EU27 indicator peaking at 13.2 million and the CEE8 average peaking close to 1.4. The sharp correction in 2020 reflects the pandemic-related closure of dealerships and factories, mobility restrictions and heightened consumer uncertainty. The subsequent weakness through 2022 was prolonged by ongoing supply-chain disruptions and, later, the erosion of household purchasing power caused by high inflation and rising financing costs. Registrations began to recover in 2023. The recovery appears much stronger in the CEE8, where the indicator continued to rise in 2024 and 2025, approaching its pre-pandemic level. By contrast, the EU27 recovery has been more moderate and car registrations remain well below the 2019 peak. The relative resilience of CEE may, among all, reflect catch-up demand and replacement of older vehicle fleets, whereas more mature EU markets continue to face weaker consumer confidence and change of working habits (more work from home). Looking at the trends by type of fuel, share of petrol and diesel cars have been declining in the EU, while plug-in hybrids and battery-only cars are on the rise.

Market movements

In Romania, central bank left the key policy rate unchanged at 6.5% and we expect the key rate to remain at 6.50% until May 2027. Rate hikes appear unlikely in an economy operating with a negative output gap. Further, we see year-end inflation at 5.9% y/y, compared with 10.4% y/y in the latest June reading. A sharp deceleration is likely over the summer months, driven by favorable base effects. In Hungary, the July central-government cash balance posted a record HUF 524.3bn surplus (the largest single-month surplus in over two decades and a third consecutive monthly surplus). The government is expected to announce additional deficit-reduction measured at the end of August as Hungary targets meeting Maastricht criteria by 2030 as part of the efforts to adopt the euro. CEE currencies have been weaker against the euro at the beginning of the week, while bond market shows mixed performance with Romanian 10Y yields following more visibly on Monday.

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