Erste Bank Research Team
Erste Bank
On the radar
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PPI in Hungary was released at -3% y/y.
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GDP growth in the first quarter of 2024 was 1.7% y/y in Hungary and 0.4% y/y in Czechia.
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Today, Poland, Slovenia and Croatia will publish flash estimates of April’s inflation.
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Croatia will also reveal industrial production and retail sales growth.
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Serbia will release industrial production, retail sales, trade balance and GDP growth at 12.
Economic developments
As the 20th anniversary of the accession of Slovakia, Czechia, Poland, Hungary and Slovenia to the European Union is tomorrow, we have decided to share one more chart from our latest Special report “20 Years after EU’s enlargement". This time, we take a look at the proportion of EU cohesion funds allocated to the five countries from the CEE region. At the time of the accession, CEE countries that joined in 2004 received only 5% of total EU payments, while in 2022 that share stood at 32%. Together with other CEE countries that joined later, this share stood at 41%. The CEE region has received EUR 205bn in total since the EU membership of the respective countries. All CEE countries, regardless of the timing of their EU membership, have received more from the EU than they paid in national contributions. Even now, none of the EU countries are close to being net payers into the EU budget, which will however have to change in the medium term.
Market developments
While expectations of delayed FED interest rate cuts weighed on CEE fixed income markets in previous months, shortly ahead of the crucial FED meeting, CEE currencies edged marginally higher, and 10Y government bond yields in CEE stagnated or collapsed. Even if FED confirms its less dovish narrative tomorrow, the market has already priced in less aggressive monetary easing, not only in the U.S. but also in CEE, limiting potential damage. Yesterday, Romania's Ministry of Finance reopened ROMGBs 2026 and 2029, borrowing RON 461m and RON 500m, respectively. However, the demand for the 2Y bond was relatively low, with only a 1.07 bid-to-cover ratio.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
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