The sentiment indicators improve in CEE

On the radar

• Fitch Ratings affirmed the sovereign ratings of Croatia, Czechia, and Romania.
• Today, PMI data will be released in Czechia, Hungary, Poland, and Romania.

Economic developments

The latest business and consumer survey data published by the European Commission at the end of last week point to an improvement in economic momentum across the CEE region at the start of Q3 2026. The rise in the Economic Sentiment Indicator (ESI) was driven primarily by a strong rebound in consumer confidence, which appears to have recovered from the shock caused by the military conflict in the Middle East. Average consumer confidence across the CEE8 reached a five-year high, partly supported by exceptionally strong sentiment in Hungary, where consumer confidence climbed to its highest level since 2018. Given the heightened volatility in fuel prices during July, however, it remains to be seen whether the August data will confirm the recent improvement in sentiment or reveal a setback.

Market movements

The Hungarian forint weakened by 0.8% against the euro on Friday, negatively affected by news that the Paks nuclear power plant will temporarily halt electricity production due to low water levels in the Danube River. The outage is expected to pose challenges for the electricity grid, and several large companies have already been asked to significantly reduce their electricity consumption in recent days. Fitch Ratings' decision to affirm the sovereign ratings of Croatia, Czechia, and Romania, published on Friday, was in line with our expectations. However, the report on Romania contained some important information suggesting that the country only narrowly avoided a rating downgrade. The next rating review of Romania by Moody's is scheduled for this Friday.

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