CEE: Saving rates remain relatively high

On the radar

• President Trump paused reciprocal tariffs for 90 days but increased tariffs on China to 125%
• Trade deficit in Croatia was at EUR 1384 million in January, while tourism arrivals grew 0.2% y/y in February.
• Czechia will publish industrial output growth and final March inflation number at 9 AM CET.
• At 10.30 AM CET, Slovenia will release industrial output growth.
• At noon CET, Serbia’s central bank will announce interest rate decision.

Economic developments

The household saving rate in the euro area was at 15.3% in the fourth quarter of 2024 (the same rate as in the third quarter of 2024), which is explained by increasing consumption and gross disposable income. Throughout 2024, it averaged 15.4% in the euro area. The saving rate has thus been holding at an elevated level for a longer period of time already. Data for the CEE region is available only for selected countries. While in Czechia and Hungary the saving rate is even higher than the Eurozone's average, in Poland the situation is quite the opposite. After a surge of savings during the pandemic, households in Poland seem to have spent them in the following years. However, since the beginning of 2022, the saving rate has been gradually increasing. All in all, we see relatively high saving rates as a brake to a more dynamic recovery.

Market developments

President Trump paused reciprocal tariffs for 90 days but increased the tariffs on China to 125%. That means for another 3 months, the European Union and the rest of the world, excluding China, will face a common 10% tariff rate. Stock markets across the globe increased in the evening, and the 10Y yield on US Treasuries declined to 4.28% from above 4.4% the previous day. Locally, currencies appreciated against the euro. EURCZK went to 25.05, EURHUF dropped to 402, and EURPLN is back at 4.24. Long-term yields remain slightly higher. Serbia’s central bank has a rate-setting meeting scheduled for today. We expect it to keep the policy rate unchanged, and actually, lately, we have downsized our expectations for the size of monetary easing in Serbia this year. In Czechia, central banker Prochazka suggested that the central bank should remain cautious, and that the pause in the monetary easing cycle may last longer.

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