Czechia with the most expensive energy in CEE for households

On the radar

• Romanian central bank left the key policy rate unchanged at 6.5%.
• Inflation in Romania eased slightly to 9.76% y/y in October.
• Inflation in Serbia landed at 2.8% y/y in October.
• Today, at 8 AM CET, Romania will release industrial output growth in September.
• At 9 AM CET, Slovakia publishes local inflation data for October.
• At 10 MA CET, Poland will show flash estimate of 3QGDP data.
• Serbia’s central bank holds a rate setting meeting with decision scheduled at noon CET.
• Czechia, Poland and Romania will publish trade and current account data throughout a day.

Economic developments

Today, we compare electricity and gas prices for households in the region (in EUR per kWh, including taxes). We also look back at 2015 and 2020 as reference points for further comparison. First, the average gas price in the region is much lower than the electricity price. Second, electricity prices have increased to a greater extent since 2015 than gas prices. The largest price increases occurred after the pandemic. Furthermore, the price gap between countries has widened for electricity but remains relatively narrow for gas. Price changes in EUR may be influenced by exchange rates, but when we examine price dynamics in national currencies, the difference is not substantial. At first glance, it is clear that Czechia stands out, as it has the highest electricity and gas prices in the region. Czechia also experienced the highest price increase over the last decade, alongside Poland. In contrast to Czechia, electricity and gas prices for Hungarian households have not risen since the pandemic.

Market movements

Romanian central bank kept policy rate unchanged at 6.5%. Our current baseline is for a rate cut in 1H26 at a meeting with Inflation Report release. The central bank is likely to wait and see the effects of the elimination of the remaining price caps on natural gas prices and basic food items markups before making a move. In this case, the first cut will likely take place at May meeting. All in all, we see 125bp of easing, starting in May, to 5.25% by end-2026. Czechia sold 2034, 2036 and 2038 government papers on Wednesday. With yields being marginally higher this week compared to the previous one in Czechia. In Hungary, move on the bond market was more pronounced following the news about higher budget deficit and need to finance borrowing needs on international bond market. 10Y yields in Hungary are currently higher than long-term yields in Romania. Poland’s central bank warned that the latest deficit and public debt paths pose risks to macroeconomic stability.

Download The Full CEE Macro Daily