CEE: Regaining stability and focusing on growth prospects

There are several changes in this edition of CEE Macro Outlook as we already look more into 2026. Lets start with good news. In Czechia, the first half of the year was strong. We revise 2025 to the upside, to 2.3% in 2025. Poland is on track to be the fastest-growing economy in the region (3.4% this year and above 3% in 2026). Croatia's performance is strong as well. In other CEE countreis, the 2Q25 GDP data brought limited optimism for the growth outlook in most of the CEE countries and further downward growth revisions follow for 2025. The Hungarian economy is likely to stagnate mostly this year (growth close to 0.5%). Revisions to the downside took place in Serbia and Slovakia. In Slovakia, we expect growth below 1% in 2025. In Serbia, the first half of the year was rather disappointing, with growth dynamics “only” around 2%. We therefore adjust our expectations for Serbia and expect 2025 growth below 3%. In Romania, we stick to our 1.3% growth forecast.

Looking more under the hood of 2026 growth prospects: we finally have more clarity regarding tariffs - a uniform rate of 15% with comprehensive accompanying measures. It seems that most of the damage has already happened and the direct negative impact in 2026 is going to be quite contained. Less uncertainty, as evidenced by the decline of the Trade Uncertainty Index, should support economic activity. Further, the time stamp on the utilization of RRF funds (implementation of the reforms and investments until the end of 2026) should provide another boost. We expect higher average growth next year in the region.

Regarding inflation, if we look at the 2025 averages, inflation will be slightly higher in almost all CEE countries compared to last year, but it should ease in 2026. This year, adjustments in monetary policy may only be expected in Poland and in Hungary (minor adjustments of 25 basis points). A rate cut in Hungary is conditional on global and regional interest rate developments. Monetary easing should be resumed in the course of 2026 in all CEE countries except for Czechia, where we see the key policy rate at 3.5% for longer. Inflation development should support interest rate cuts across the region.

Regarding fiscal stance: Romania and Slovakia proceed with austerity measures. Poland, on the other hand, does not plan to consolidate that resulted in the decision of Fitch Ratings to change the Poland’s outlook from stable to negative. Czechia announced fiscal expansion.

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