CEE sentiment strengthens in Q3, as September figures sustain the gains

Erste Bank Research Team Erste Bank

On the radar

Today in Croatia, 2Q current account data, August industrial production and retail sales are due for release.
In Hungary, August PPI and trade balance data are scheduled for today.
Czechia will see the release of final 2Q GDP figures.
In Poland, preliminary September CPI is due today at 9:30 CET.
Slovenia will publish September CPI at 11:00 CET.
In Serbia, August industrial production, retail sales and trade balance data are due for release.

Economic developments

Fresh ESI data released yesterday offer a timely check on confidence across CEE as the region heads into the final quarter of 2026. Sentiment improved in Q3 in several economies, most visibly in Hungary, while Croatia and Czechia remained above their long-term averages. September readings largely maintained the gains accumulated during Q3, suggesting that the quarterly improvement in sentiment remained intact at the end of the period. Romania also saw a modest improvement in Q3 after weakening in the previous quarter, although at around 92.5 its ESI remains among the lowest in the region and well below its long-term average. A clear explanation for this level is consistent with the Romanian economy still facing headwinds from fiscal consolidation and political turmoil, which is weighing on domestic demand and confidence. On the other hand, Croatia continues to record the strongest sentiment readings, while Hungary’s increase from around 95.8 in Q1 to above 101 in Q3 marks the clearest improvement over the course of the year. In general, the latest readings point to firmer confidence across parts of CEE in this third quarter of 2026, but the gap between economies remains considerable, with domestic factors such as fiscal consolidation continuing to shape the pace of recovery.

Market movements

CEE currencies were largely stable, with only modest daily moves against the euro, while regional bond yields edged lower, led by Romania and Poland, although weekly changes remained positive across most markets. In Czechia, minutes from the latest ČNB meeting struck a hawkish tone, signaling that a further rate increase could be warranted should domestic demand, credit growth and external cost pressures persist. In Romania, non-resident holdings of local sovereign debt declined to 17.1% in July amid continued foreign outflows, while pension funds further increased their exposure. In Poland, Finance Minister Domański ruled out additional spending ahead of the 2027 election, citing limited fiscal space as the budget deficit remains elevated.

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Erste Bank Research Team

Erste Bank

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