Unemployment in CEE slightly up
On the radar
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On Friday, PMI indices for November were published in Czechia, Hungary and Poland and they went up in all three countries.
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November’s flash HICP inflation rate dropped to 2.4% y/y for Eurozone.
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Unemployment rate in Romania dropped marginally to 5.4% in Romania.
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In Czechia, real wage growth for 3Q will be published in the morning.
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Otherwise, there are no major releases scheduled for today.
Economic developments
Today, we look at labor market data. The EU unemployment rate remained stable at 6.0% in October 2023. That is marginally lower compared to October 2022 (6.1%) as well as below the pre-pandemic rates (6.5% in March 2020). While in the EU there was particularly no change in the unemployment rates for last couple of months, the situation in the region is slightly different. In CEE, unemployment rates have been increasing since the beginning of the year. Although the change in average unemployment rate in CEE7 is not particularly big, the moderate upward trend seems to be quite visible. Compared to October 2022, unemployment rate went up only in Czechia, Hungary and Slovenia, however. In all other countries, the unemployment rate fell. Czechia, which faces recession in 2023, saw the most extensive change as unemployment rate increased from 2.2% in October 2022 to 2.9% in October 2023. In Hungary, where the GDP growth will also be negative this year, unemployment rate is higher by 0.4 percentage point in October 2023 compared to year ago.
Market developments
The CEE currencies strengthened against the euro last week and Polish zloty performed particularly well. Such a development was driven by global trends, as expectations for interest rate cuts by major central banks next year will be growing, amid falling inflation (Eurozone flash estimate for November is at 2.4% y/y) and easing demand pressure. Similar factors were behind the decline of long-term yields in the region last week. This week, Polish and Serbian central bank meetings are the key local events. We expect both banks to remain on hold in December.
Author
Erste Bank Research Team
Erste Bank
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