US imports from the CEE visibly drop

On the radar

• Industrial production declined in Slovakia by -4.6% y/y in July, while in Slovenia it grew by 1.0% y/y in July.
• Final inflation rate in Czechia was confirmed at 2.5% y/y in August.
• August inflation rate in Romania was reported at 9.9% y/y.
• At noon CET, Serbia’s central bank will announce interest rate decision.

Economic developments

Today we look at the trade development between the US and the region. The deviation of the actual US imports from the CEE region compared to the trend based on data prior to the trade war is visible. In the first half of the year the actual trade between the US and the CEE suffered. US imports went down in Q1 and in the second quarter the value of 2025 was even lower reflecting the reality of the tariffs. Since August, we have had more clarity regarding tariffs - a uniform rate of 15% with comprehensive accompanying measures. Although the rate is higher than the 10% we assumed as a baseline scenario in April when the tariffs were announced, the removal of a 25% tariff for the automotive sector supports the region’s overall position. It seems that most of the damage has already happened, as evidenced by decline of trade between the US and the region. Therefore, the economic growth has slowed considerably. It seems, however, that the direct negative impact in 2026 is going to be quite contained.

Market movements

Developments in Poland took the center stage on Wednesday as Russia’s drones incurred Poland’s airspace. Poland turned to NATO allies after Prime Minister Tusk said airspace violation was intentional provocation from Moscow. The Article 4 of the alliance treaty was invoked. Stocks dropped, the Polish zloty depreciated against the euro while the long-term yields are marginally higher since the beginning of the week reflecting the increasing geopolitical risks. Today, locally, Serbia’s central bank will announce the interest rate decision, and we do not expect any change. On global markets, the ECB is likely to leave key interest rates unchanged again at its meeting. In addition, updated forecasts by ECB staff on growth and inflation will be published. Here, too, we do not expect any significant changes.

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