Household lending gains momentum across CEE

On the radar

• Today at 8:30am CET, Hungary will release its July inflation figures.
• In the evening, Moody’s is scheduled to publish its rating review of Romania. We expect both the rating and outlook to remain unchanged.

Economic developments

Growth in loans to households remained solid across CEE in 1H26, according to data published by the ECB. In countries that had previously recorded the strongest loan growth, such as Croatia and Romania, the pace moderated somewhat, moving closer to 10%. In all other markets, however, household loan growth accelerated. Particularly strong growth was recorded in Hungary, where lending momentum strengthened further. The stock of retail loans in Hungary has historically been low compared with regional peers, while the Hungarian economy stagnated over the past three years. The normalization of interest rates, together with an improvement in economic and consumer confidence, has provided an additional boost to household lending, supporting a gradual catch-up with regional peers..

Market movements

Yesterday’s CNB meeting left interest rates unchanged and confirmed our view that there is no need to rush into further monetary policy tightening. The CNB’s new forecast showed a 3M PRIBOR path consistent with virtually no further rate hikes, while the market had been pricing in up to three additional hikes. The new forecast could therefore prompt some adjustment in market expectations, potentially contributing to a modest weakening of the Czech koruna as well as a decline in certain market interest rates and government bond yields. The Hungarian forint weakened against the euro yesterday amid a firmer US dollar and continued expectations of further monetary policy easing in Hungary. The prospect of additional rate cuts remains strong, with the recently published minutes from the latest MPC meeting indicating that further easing remains possible.

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