Erste Bank Research Team
Erste Bank
On the radar
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There are no major releases scheduled today in CEE.
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Hungarian central bank will publish the minutes from the meeting.
Economic developments
In 2023, GDP per inhabitant as a percentage of the EU27, expressed in Purchasing Power Standards (PPS), increased compared to 2022 in all CEE countries except Poland. In most of these countries (Croatia, Romania, Slovenia, Slovakia, and Serbia), the increase reached three to four percentage points within one year. However, the gains in GDP remain uneven within the countries. In the capital cities, GDP per inhabitant as a percentage of the EU27, expressed in Purchasing Power Standards (PPS), is much higher than the country average. This positioning of capital cities may be influenced by specific factors. For example, in the case of Prague (with GDP at 193% of EU27), a high inflow of commuting workers is mentioned by Eurostat as the reason. Conversely, rural areas have GDP levels below the country average. In general, Czechia and Slovenia had the highest GDP per inhabitant as a percentage of the EU27 in 2023 at 90% and 92%, respectively. All other countries are placed between 70% and 80% of the EU27, with Serbia at only 49%. Over last two decades Czechia and Slovenia reduced the gap by 10 percentage points while other CEE countries by at least 20 percentage points.
Market developments
EURHUF dropped to 402 while EURPLN is at 4.17, reflecting gains on the foreign exchange market in the region. The CEE currencies have not been this strong against the euro for quite some time. However, the trend in the bond market has reversed, with long-term yields increasing on Tuesday after Federal Reserve Chair Powell stated that the US central bank is in no rush to adjust interest rates. In other global news, the EU vowed to respond to the 25% tariffs that President Donald Trump announced the US would impose on steel and aluminum imports. In Romania, following the resignation of Iohannis, the Court ruled that the vacancy in the presidential office justifies the temporary assumption of presidential duties by Bolojan, in accordance with the Constitution.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
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