CEE support to Ukraine extends beyond transfers

Erste Bank Research Team Erste Bank

On the radar

Hungary’s central bank cut its policy rate by 25bp to 5.50%.
Serbia’s average net wage growth accelerated to 9.4% y/y in real terms.
Poland’s registered unemployment rate remained unchanged at 5.8% in July.
No relevant releases scheduled for today.

Economic developments

Ukraine’s Independence Day on Sunday brought renewed assurances of European support, with EU leaders reiterating their commitment to financial, humanitarian, and military assistance. Therefore, we take this opportunity to discuss the scale of CEE support to Ukraine. Today’s chart covers bilateral allocations from 24 January 2022 to June 2026, measured against donors’ 2021 GDP; in this case, allocations refer to government aid already delivered or specified for delivery and exclude private and NGO support (Trebesch et al., 2026). This distinction matters for CEE, where support extends well beyond direct transfers. Czechia, for example, combines more moderate bilateral allocations with the highest refugee presence in the comparison, while Poland pairs sizeable, predominantly military assistance with substantial refugee hosting relative to its population. At the same time, the CEE7 aggregate allocation is broadly in line with, the EU27 aggregate, suggesting that the region’s contribution is comparable once economic size is considered. On the other hand, CEE countries host a disproportionately high number of displaced Ukrainians, making refugee reception an important additional channel of support that is not captured in bilateral aid figures. For instance, integration policies are increasingly shifting towards longer-term labour-market participation and self-sufficiency, especially in Czechia and Poland, hinting that support is gradually evolving from emergency assistance towards deeper economic and social integration. Overall, it can be concluded that CEE region remains a relevant supporter of Ukraine through both direct aid and the integration of displaced Ukrainians at home.

Market movements

Regional FX remained firm into Wednesday. In Poland, the zloty is holding close to 4.30 against the euro, while attention in the domestic debt market turns to today’s scheduled Treasury bond auction after yields eased yesterday. In Hungary, the forint retained most of its post-meeting gains after the Hungarian central bank cut the base rate by 25bp to 5.50%. The EUR/HUF traded down to around 360.6 as the central bank continued to stress the importance of FX-market stability and the Governor Varga announced that the review of the MNB's inflation target will conclude in autumn. This is a step tied to euro-adoption ambitions and the biggest question is whether we will get from the current 3% to the ECB’s target of 2% in one or two steps. As for interest rate outlook, we continue to maintain our expectation of a 5.00 percent year-end interest rate level. The koruna remains near 24.08 EUR/CZK, around its strongest level since 2023. Recent dollar softness has provided support for the koruna, with today’s US PCE inflation release likely to be the next key driver for the dollar. On the fiscal side, Slovakia’s Prime Minister Fico signaled that the transaction tax could be scrapped from January 2027. Business organizations welcomed the move but would favor the roughly €400m revenue shortfall to be covered through spending cuts or higher spending efficiency rather than new taxes.

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Erste Bank Research Team

Erste Bank

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