CEE: Expected development in response to flash GDP estimates

Growth

We finally get more clarity regarding tariffs. On July 27, the European Union and US agreed on a framework agreement that not only set the tariff rate at a uniform rate of 15%, butalso included comprehensive accompanying measures. The most notable concessions are massive investments in the US, but also a commitment to purchase significantly higher quantities of liquefied natural gas and/or oil from the US. The agreement will have implications for 2026 growth forecasts mainly. The 15% tariff rate falls between assumptions of our baseline and adverse scenarios. In other words, we would expect, on average, up to a -0.5 percentagepoint revision in response to the new tariff rate.

After seeing 2Q25 flash estimates, we would like to noteadjustments to our growth forecasts for the rest of the year and beyond. The Czech economy expanded by 0.2% q/q and 2.4% y/y. Although the pace of quarterly growth decelerated significantly from the 0.7% recorded in 1Q (due to the decline of export stockpiling), the first half of the year was strong, translating into risks to the upside to our current forecast of 2% in 2025. Poland is on track to be the fastest-growing economy in the region and there are upside risks to our current forecast of 3.2% in 2025. Hungary delivered a mild upside surprise, with GDP rising by 0.4% q/q. Despite that development, the Hungarian economy is likely to stagnate mostly this year (growth close to 0%). Revisions to the downside will, as well, take place in Romania and Slovakia. While in Romania we wait for the GDP structure, in Slovakia we expect growth below 1% in 2025. In Serbia, the first half of the year was rather disappointing, with growth dynamics “only” around 2%. We therefore adjust our expectations for Serbia and expect growth below 3%.
Detailed CEEMacroOutlook will be published in mid-September, once GDP structure is published.

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