Growth navigator in response to 2Q26 GDP data

Erste Bank Research Team Erste Bank

The first half of the year proved to be relatively solid in most of the region. In response to 2Q26 flash growth estimates, we revised our 2026 GDP forecasts up in Hungary (1.7%). In Serbia and Slovenia, risks are clearly to the upside as well, given the very strong development in the first half of the year. In other CEE countries, we mostly maintain our 2026 projections. Only in Slovakia and Romania do we see risks to the downside to our current full-year expectations. Overall, the risks to our growth forecasts are related to global developments and the ongoing conflict in the Middle East. Risks to CEE economic development may also stem from possible power supply constraints if the problem with water levels in Europe continues or deepens.

2026 average inflation is expected to be marginally lower in the region compared to the previous year. Fears of inflation have luckily not materialized, although commodity prices remain elevated. Average 2026 inflation was revised down in Czechia, Hungary, Serbia and Slovakia. In Serbia, further downward revision is likely. In Romania fast disinflation is expected over the course of second half of the year. Recent development of commodity prices continue to pose an upward risk to inflation forecasts.

There is some divergence in monetary policy direction in the region. While Hungary began a monetary easing cycle, supported by low inflation and the strong HUF against the euro, the Czech National Bank keeps sounding hawkish. Although headline inflation is below the central bank’s target, central bankers seem to be worried about wage pressure and core inflation developments. We do not assume a rate hike this year (though we note it may be a close call. In the longer-term horizon, we see a continuation of monetary easing in Hungary, reversal of the rate hike in Czechia and rate cuts in Romania once inflation falls visibly. Poland and Serbia are to keep their rates stable. However, in Serbia, expected downward revision of inflation may open space for easing in 1H27.

Download The Full CEE Outlook

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.

GBP/USD holds losses below 1.3550 after weak UK jobs data

GBP/USD holds losses below 1.3550 in European trading hours on Tuesday. The UK ILO Unemployment Rate held steady at 4.9% in the three months to June, against a forecast of 4.8%, while Employment Change arrived at 83K in the same period versus 147K previous. Weak UK labor data keep the British Pound under pressure, driving the pair lower.

EUR/USD stays below 1.1600 despite upbeat sentiment data

EUR/USD struggles to gain traction and trades below 1.1600 in the European session on Tuesday, even after the data from the Eurozone and Germany highlighted improving economic sentiment in August. The US Dollar (USD) benefits from the risk-averse market atmosphere as tensions in Middle East remain high, making it difficult for the pair to turn north.

Gold sticks to losses below $4,400 as USD recovers further from two-month low

Gold remains depressed below the $4,400 mark through the first half of the European session, snapping a two-day winning streak amid a broadly firmer US Dollar. Inflation risks stemming from higher oil prices back the case for at least one interest rate hike by the US Federal Reserve in 2026.

Pi Network holds steady amid app studio costs surge to push user adoption

Pi Network extends a consolidation range capped below $0.0900 holding above the $0.0839 support level. PI token remains under pressure as the Core Team pushes for real user adoption by raising costs for AI-powered app creation, effective from August 24. Leverage-linked risk exposure eases as Open Interest declines despite an increase in social interest.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.