CEE: Growth navigator after 4Q25 GDP data

The end of the year was particularly strong in Poland (4.0% y/y) and Czechia (2.4% y/y). Serbia experienced 2.2% y/y growth in 4Q25. Slovakia and Slovenia also ended 2025 on a stronger note with growth at 1% y/y and 2% y/y, respectively (growth above market consensus in both countries). Hungary expanded by 0.7% y/y, falling short of expectations. Romania‘s economy contracted substantially, by almost 2% q/q, leaving the y/y growth at just 0.1%. Such a development prompts us to revise 2026 growth downward to 1% in Romania. At the same time, we inched up growth expectations in Poland to 4% this year. GDP forecasts for other countries remain mostly unchanged. We see CEE8 average growth at 2.7% in 2026, about 1.5 percentage points higher than the Eurozone GDP forecast.

Throughout 2025, inflation eased in most CEE countries. This year, we expect disinflation to continue. Average inflation in CEE is expected to fall from 4% in 2025 to 3.2% in 2026. In Czechia, Poland and Slovenia, it is expected to be at 2% on average in 2026. This year average inflation will remain most elevated in Romania (7.2%) due to the persisting effects of fiscal consolidation. In Slovakia, the expected average at 4.1% is also higher compared to other CEE countries as fiscal tightening is also in place.

As inflation is expected to decline further, we see monetary easing in all CEE countries except for Czechia. It seems that the terminal rate in Czechia is 3.5% for the time being, despite recent comments suggesting possibility of rate cut this year. In Hungary, interest rate cuts may be in the cards as soon as February, given January’s inflation footprint. In Poland, we expect monetary easing to be restored in March, while in Romania and Serbia, lowering interest rates will take more time.

The detailed CEE Macro Outlook will be published in mid-March, once the GDP structure is published for all countries.

Download The Full CEE outlook