Renewables gain ground, as CEE continues to catch up

Erste Bank Research Team Erste Bank

On the radar

Unemployment rate eased marginally in Poland to 5.8% in June.
Today, Hungary unemployment rate will be published in Hungary.
At noon CET, real wage gross is due in Serbia.

Economic developments

Provisional data for 2025 show that the share of energy from renewable sources in gross final energy consumption in the EU reached 26.2%. The share has been constantly rising and since 2010 it roughly doubled. Significant differences remain across Member States. Within the EU, Sweden leads with share of energy from renewable sources at 65% and it primarily relied on solid biomass, hydro and wind. Other Nordic countries and several Baltic states also record renewable shares well above the EU average. Within CEE, only Croatia has share of energy from renewable resource slightly above EU average, while Romania and Slovenia are on pair with EU average. In contrast, Slovakia remains one of the weaker performers in the region, with renewables accounting for only around 16% of final energy consumption. This places the country significantly below both the EU average and most regional peers, reflecting its continued reliance on nuclear energy and fossil fuels.

Market movements

Brent oil price is getting close to USD 100 per barrel as Trump threatens more attacks on Iran after Yemen-based Houthis joined the war. The ECB Governing Council decided to leave key interest rates unchanged. Further, it considers itself adequately positioned to manage the current uncertainties. Energy prices (oil, gas, and electricity) will remain a crucial factor in assessing the ECB’s monetary policy in the short term. Czech central banker Kubicek admitted there is possibility of further rate hike by year-end, but there is no urgency to tighten policy quickly in his view. On the other hand, Poland’s central banker Kotecki sees the current level of Poland’s interest rate as close to optimal. He recognizes, however, that there are many external risks. Romania’s Parliament will be recalled from its summer recess for a session on July 27-31 to debate draft laws that are key milestones in the country’s recovery program needed to obtain EU funds.

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Erste Bank Research Team

Erste Bank

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