OECD points to a softening of global growth

Erste Bank Research Team Erste Bank

On the radar

Final inflation in Croatia arrived at 3.7% y/y in February.
Current account in Romania in January posted a deficit of EUR -1646 million.
In Poland, January’s trade and current account deficits reached EUR -1506 million and EUR -168 million, respectively.
In Poland, core inflation eased marginally to 3.6% y/y in February.
There are no releases scheduled for today.

Economic developments

According to the latest OECD interim forecasts, the global economy remained resilient in 2024. However, recent activity indicators point to a softening of global growth prospects. This is reflected in a downward revision of global growth forecasts for 2025 and 2026. The OECD sees the global economy expanding by 3.1% this year and 3.0% in the following year, with higher trade barriers and increased policy uncertainty weighing on investment and household spending. Economic prospects have also worsened. The OECD has lowered Eurozone's GDP forecast by 0.3 percentage points, with growth expected to be at 1% in 2025 and 1.2% in 2026. Recent developments and announcements regarding fiscal stimulus in Europe, however, should mitigate the negative impact of tariffs to a great extent. The CEE7 region is currently projected to grow by 2.6% on average in 2025, an acceleration from 2.0% in 2024.

Market movements

Tuesday is expected to be quite eventful regarding global news. Lawmakers in Germany will vote on a bill that should unlock billions of euros for defense and infrastructure investment in the coming years. Furthermore, President Trump is set to speak with Russian President Putin about ending the war in Ukraine. The FX market remains relatively stable, with EURHUF below 400. Long-term yields have slightly decreased at the beginning of the week. On Monday, Romania sold government papers maturing in 2031 priced to yield 7.4%. Slovakia was also active in the bond market and successfully placed a range of bonds maturing in 2033, 2034, 2035, as well as 2051. Demand was very strong, with bid-to-cover ratios between 2 and 3.6 depending on the tenor.

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Erste Bank Research Team

Erste Bank

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