Employment rate grows across CEE, duration of working life rises

Erste Bank Research Team Erste Bank

On the radar

Fitch affirmed Croatia’s rating at A- with stable outlook.
Moody’s affirmed Romania’s rating at Baa3 but change outlook from stable to negative.
Fitch affirmed Poland A- with stable outlook.
In Czechia, February producer prices were published at -0.1% y/y.
At 10 AM CET, Czechia will release current account data in January.
Croatia will release final inflation data in February at 11 AM CET.
Poland will release trade and current account balance in January as well as core inflation in February at 2 PM CET.
Current account data is due in Romania as well today.

Economic developments

In the fourth quarter of 2024, the employment rate of people aged 20-64 in the EU stood at 75.9%, stable compared with the third quarter of 2024. In the CEE7, the employment rate in 2024 reached 76.6%. The lowest employment rate is in Croatia and Serbia. The highest, on the other hand, is in Czechia. Looking from a broader perspective, the employment rate has increased by more than 10 percentage points in the region over the last decade. In the face of demographic changes the space for further substantial growth of employment rates seems limited at this point. Especially, the duration of working life has also increased. Ten years ago, a 15-year-old person was expected to work 33.1 years, while in 2023 the duration of working life averaged at 35.4 in CEE7. The CEE region benefited from inflow of Ukrainian refugees in recent years as well. The successful accommodation of them into the labor market only confirms the labor market tightness and challenges ahead.

Market developments

While there was no change in rating and outlook assessment in Croatia and Poland, Moody’s changed the Romania’s outlook to negative from stable and matched the recent assessment of Fitch and S&P. We do not expect that this decision will have any major impact on the market as it has been mostly lining up with other rating agencies. The Romania’s electoral bureau on Saturday cleared the candidacy of George Simion to take part in May’s presidential election. CEE currencies continue to hold strong against the euro, while the bond market showed mixed performance over last week. This week, the US Fed meeting will be the key event for the markets. Although economic concerns have become increasingly dominant in recent weeks, we do not expect key interest rates to change at this point of time.

Download The Full CEE Macro Daily

Author

Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.