CEE: Public debt rose the most in Poland and Romania

On the radar

• Trade surplus in Slovakia reached EUR 246.5 million. In Czechia, trade deficit was at CZK -1.7 billion and in Croatia at EUR -1752 million.
• Industrial output growth in Czechia surprised to the upside arriving at 4.9% y/y in July.
• Producer prices in Serbia increased by 1.3% y/y in August.
• Romania reported trade deficit of 2636.9 million euro for July.
• Inflation rate in August was published at 4.3% y/y in Hungary.
• At 11 AM CET, Croatia publishes producer prices in August.

Economic developments

Triggered by the revision of Poland’s outlook from negative to stable, today we examine the change in the public debt-to-GDP ratio over the past few years. We use the Eurostat dataset, in which the latest available data point regarding public finances refers to Q1 2025. Although Romania has the highest budget deficit in terms of GDP, Poland experienced the largest increase in public debt over the past year (Eurostat data between Q1 2025 and Q1 2024) and over the past two years (between Q1 2025 and Q1 2023). Furthermore, when looking at aggregate figures, the CEE8 average public debt-to-GDP ratio has increased from 52.5% in 2022 to roughly 60% in 2025 (Erste forecast). This is primarily the result of the aforementioned significant increases in public debt in Poland and Romania. In Slovakia, public debt also rose, albeit to a lesser extent. In Croatia and Slovenia, the public debt-to-GDP ratio declined, while in the other countries it remained stable.

Market movements

Romania sold government securities maturing in 2030 and 2033, priced to yield 6.58% and 7.56%, respectively. Long-term yields moved marginally lower across the region on Monday. The FX market remained relatively stable at the beginning of the week. Hungarian central bank Governor Varga stated that tight monetary policy is necessary to slow inflation and maintain financial stability, which is reflected in the exchange rate. In Romania, austerity measures in the public sector led to teacher protests at the beginning of the school year.

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