Sentiment in CEE lacks stronger impulse

Erste Bank Research Team Erste Bank

On the radar

3Q25 GDP in Croatia landed at 2.3% y/y
Retail sales in Slovenia grew by 2.2% y/y in October
Today, at 8.30 AM CET Hungary will publish unemployment rate and producer prices growth.
At 9 AM CET, Czechia releases 3Q25 GDP structure
Poland and Slovenia will publish flash inflation for November.
Croatia and Serbia have industrial output and retail sales growth release scheduled.

Economic developments

The CEE8 average Economic Sentiment Indicator (ESI) increased marginally in November. However, the picture across countries has been mixed. In Czechia and Hungary, economic sentiment worsened toward the end of 2025, while in other CEE countries sentiment improved. Retreating pessimism is particularly visible in Romania, where fiscal consolidation and global headwinds had a dampening effect throughout 2025. As far as consumer confidence is concerned, November marks another month of improving households’ assessment of their situation. Consumer confidence, although recovering from its 2022 trough, remains significantly below pre-pandemic levels and shows only modest improvement in 2025. Overall, we continue to see a lack of stronger impulses that could trigger a more pronounced recovery, whether in the industrial or retail sectors.

Market movements

CEE currencies have been slightly stronger against euro this week, while long term yields declined most notably in Hungary and in Poland. Thus, Hungarian 10Y yields returned to below 7%. Polish President Karol Nawrocki signed off on a bill on Thursday raising corporate income tax for banks. Given quite stretched fiscal position of Poland, additional revenues should help to stabilize and even reduce the budget deficit in years to come. At this point government deficit is estimated at close to 7% this and next year. Romania’s Ministry of Finance announced that budget deficit narrowed to 5.7% of GDP at the end of October. The Czech National Bank recommended stricter mortgage lending limits for investment residential properties to address potential risks related to rising housing prices, effective from April 2026.

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Erste Bank Research Team

Erste Bank

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