CEE improves their SDGs, but climate-related losses increase

Erste Bank Research Team Erste Bank

On the radar

Fitch affirmed Czech Republic’s rating at AA- with stable outlook.
Slovakia is expected to release unemployment rate.
Otherwise, the calendar for CEE is empty today.

Economic developments

In our latest CEE Special Report Social Development Goals in the region we summarize the CEE position in meeting these goals. This annual report offers a more detailed look at how the region has performed in Social Development Goals (an evaluation provided by the European Commission annually for the whole EU). CEE has maintained progress toward most of the Social Development Goals. Notably, SDG1: No poverty showed the greatest advancements, followed by SDG17: Partnership for the goals and SDG16: Peace, justice and strong institutions. SDG8: Decent work and economic growth is also worth noticing. Another important development is acceleration of the pace of progress (meaning whether countries approached the goal faster compared to the previous evaluation or slower) in two goals, that is SGD7: Affordable and clean energy as well as SDG13: Climate action. Concerning climate change impacts and adaptation, the monetary losses from weather and climate related disasters rose sharply in recent years. The thirty-year average in the EU (EUR per inhabitant) increased by 40%. As for the region, climate related economic losses increased the most in Croatia and Romania.

Market developments

This week, the key event is Jackson Hole symposium given market expectations for monetary prospects in the US. In the region, Poland’s strong GDP reading was an outlier in the region and a positive surprise. Along with elevated inflation, it has given a tailwind to the Polish zloty, which strengthened against the euro and outperformed regional peers last week. The forint remains in range-trading mode, influenced by international market sentiment. As for the bond market, the end of the week 10-year yields edged down across all CEE markets except Romania. Finally Fitch affirmed Czech Republic’s rating at AA- with stable outlook.

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Erste Bank Research Team

Erste Bank

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