Household consumption price levels lower in CEE

Erste Bank Research Team Erste Bank

On the radar

Poland will release series of data at 9.30 AM (retail sales growth, producer prices, employment and wage growth) for May.
In Poland, industrial output growth in May was stronger than expected.
Slovenia will release wage growth in May as well (due 10.30 AM CET).

Economic developments

In 2025, price levels for household final consumption expenditure differed widely across EU countries, as well as within the region. The highest price levels for household consumption were recorded in Denmark (140% of the EU average), Ireland (136%) and Luxembourg (132%). Meanwhile, the lowest levels were observed in Bulgaria (63%), Romania (65%) and Poland (73%). Thus, two CEE countries had among the lowest price levels in the EU. Hungary and Croatia had price levels for household consumption only slightly higher than Poland’s, at 77% and 78%, respectively. Within the region, Slovenia and Czechia had the highest price levels for household consumption. These two countries are also the most developed in terms of GDP per capita. Price levels in the CEE region are generally lower than in the EU as a whole, mainly because CEE economies still have lower income levels, lower wages, different consumption structures and cheaper non-tradable services.

Market movements

CEE currencies weakened against the euro toward the end of last week due to global developments. Long-term yields declined. In Czechia, central banker Zamrazilova said that last week’s interest rate hike should not be seen as the beginning of a monetary tightening cycle. While Czech Prime Minister Babiš expressed his disagreement with the central bank’s decision, Governor Michl defended the central bank’s independence. In Romania, PM-designate Veștea submitted the government list and the 2026–2028 program to Parliament on 21 June, after the Social Democrats (PSD) unanimously decided to join the cabinet. At the moment, however, it remains unclear whether he can secure a clear majority.

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.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold remains below $4,300 amid hawkish Fed, elevated US bond yields, and bullish USD

Gold struggles to capitalize on the previous day's modest rebound from the weekly low, trading below $4,300 during the Asian session on Friday amid a bullish US Dollar. The hawkish Fed, along with energy-driven inflation fears, lifts US bond yields to multi-year highs and helps the USD preserve its gains to a two-month high. This, in turn, acts as a headwind for the non-yielding bullion and warrants caution for bulls.

Crypto exchange Bitget hacked for over $350 million

Cryptocurrency exchange Bitget has been hacked for over $351 million after attackers compromised a few of its hot wallets. The hack was first flagged across several onchain tools, which initially noted over $180 million in assets moving from a few of the exchange's wallets to unidentified addresses.

Advanced economies: From one example of resilience to another

History tends to repeat itself in advanced economies. Once again, growth ultimately fell short of expectations by only a small margin in the first half of 2026, despite the conflict in Iran. As early as 2025, the impact of tariffs was less severe than feared.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.