CEE: Flash estimates for March inflation

Erste Bank Research Team Erste Bank

This week in CEE

Several CEE countries will publish flash estimates for March inflation. Poland and Slovenia will already publish March’s inflation headline on Monday, followed by Croatia and Slovakia (within HICP Eurozone releases) on Tuesday. Czechia will be the last country to release the inflation rate for March. Further, Poland will hold a rate-setting meeting. We expect stability of rates. Other than that, Croatia, Serbia and Hungary will publish the performance of the industry sector in February. In addition, Serbia will release retail sales growth in February. Trade data for February will be published in Serbia, Hungary and Slovenia, and producer prices in Hungary and Romania. Finally, Serbia and Slovenia have scheduled rating assessments by S&P and Fitch, respectively. In Slovenia we do not expect any change, while in Serbia the outlook may be changed to negative from stable.

This week in CEE

FX market developments

Throughout the week, we have seen divergence on the regional FX market. While the Czech koruna and Polish zloty strengthened against the euro, the Hungarian forint weakened by more than 1%. We see local factors behind such development, in that a higher EURHUF level is a response to changes in regulations of minimum holdings for domestic funds as well as the hawkish tone of the central bank after the interest rate decision. The Hungarian central bank kept the policy rate unchanged at 6.5%, suggesting that a stability of rates scenario throughout 2025 is most likely. The Czech central bank also decided to keep the key interest rate unchanged at 3.75% amid elevated inflation risks. This week, the Polish central bank is holding a rate-setting meeting and we expect the policy rate to remain stable at 5.75%. Currently, Government Glapinski sees higher inflation numbers as a key reason to hold off on monetary easing.

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Erste Bank Research Team

Erste Bank

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