CEE: Retail Sales lose momentum in 2Q26

On the radar

• Inflation in Czechia was confirmed at 1.7% y/y in June.
• In Romania, July’s inflation eased to 8.16% y/y, while wage growth was 3.5% y/y.
• Serbia will also release CPI for July at noon CET.
• In Slovakia, industrial sales and average monthly wage in industry will be published.

Economic developments

Retail sales growth in the first half of the year, point to moderation in household demand in 2Q26 compared with 1Q26, although the picture is somewhat mixed. Average retail sales growth slowed in virtually all countries between the first two quarters of the year. The deceleration is particularly pronounced in Poland (from around 6% to 3.5%), Czechia (5% to 3%), Croatia (3% to 1%) and Hungary (5% to below 4%). Serbia remains the clear outperformer, despite growth easing from above 8% to slightly above 5%. Romania is the notable weak spot, with retail sales contracting further in 2Q26, as fiscal consolidation measures continue to impact households. Finally, Slovakia and Slovenia show positive 2Q26 growth despite weak or broadly flat 1Q26 average growth. All in all, the 2Q26 figures suggest that the consumer-led growth impulse is losing some momentum across the region. This does not necessarily imply falling household consumption (retail sales are still expanding in most markets) but rather a smaller positive contribution to the growth from private consumption. Consumer confidence has been shaken by rising inflation in the course of the first half of the year that also affected the real wage growth dynamics and purchasing power of households.

Market movements

FX and bond markets in the region have been quite stable this week. Hungarian parliament elected András Baka (former Supreme Court justice) as Hungary's eighth president. Further, parliament passed public-finance reforms and a 2026 budget amendment during an extraordinary session. Poland signaled a renewed attempt at the windfall-profits tax that could also cover gas suppliers according to Ministry of State Assets. In Romania record-low Danube levels will likely force the shutdown of nuclear powerplant. The full shutdown would be first because of drought in more than two decades for Romania. Finally, in Croatia, opposition parties Možemo! and SDP are demanding a no-confidence vote, snap elections and Plenković's resignation amid mounting pressure over the Gospić hazardous-waste scandal.

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