Erste Bank Research Team
Erste Bank
On the radar
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Today, real wage growth will be published in Slovenia.
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Tomorrow in the morning, unemployment rate in Hungary and producer prices are due in Hungary and Slovakia.
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Otherwise, there are no other macro releases in the region.
Economic developments
The indicator Healthy Life Years (HLY) at birth measures the number of years that a person at birth is still expected to live in a healthy condition. All CEE countries but Slovenia have expected number of healthy years below the EU average. Slovakia has the lowest expected number of healthy years at birth that is 57.3 (HLY of male population is at 56.6 while female population at 58). Romania and Croatia have the HLY indicator below 60 as well. In general, in the region, female population has higher expected number of healthy years at birth. Despite that, in Hungary and Poland, women have lower retirement age than men. All in all, improving health outcomes could enhance longer labor market participation. We see it as a prerequisite for longer working life and prosperity. At this point, we see the health status as one of the obstacles to why people cannot or do not want to work longer.
Market movements
The CEE currencies weakened on Wednesday, and all the pairs- EURCZK, EURHUF, and EURPLN, rose compared to the beginning of the week. Such a homogeneous movement across currencies should be attributed to global factors rather than local factors. On Wednesday, the flash Composite PMI index for the Eurozone dropped further in July. Locally, there was another voice from the Czech central bank about expected monetary easing at the upcoming meeting. This time Holub expressed his view to switch the pace from a 50 basis point cut to 25 basis point cuts. Therefore, the key interest rate is expected to be slightly below 4% at the end of the year.
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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