Economic Snapshot for Central & Eastern Europe
January 12, 2021
Regional GDP is projected to return to growth in 2021 as activity recovers from the pandemic. Household and capital spending are set to rebound, partly supported by continued fiscal and monetary stimulus, while strengthening demand from the EU should bolster exports. Uncertainty regarding the evolution of the health crisis and the deployment of vaccines clouds the outlook.
CEE Monetary & Financial Sector News
Regional inflation fell to 2.1% in November from October’s 2.3%, reflecting easing price pressures due to weak aggregate demand. Looking ahead, inflation is seen decelerating from 2020 this year, although increasing food prices and continued loose fiscal and monetary policy stances could exert upside pressures.
In their final meetings of 2020, central banks in the Czech Republic, Hungary and Poland decided to keep their key rates on hold to further mitigate the adverse effects of the Covid-19 crisis. Going forward, policy stances are projected to remain broadly expansionary in 2021 as regional economies seek to sustain the recovery.
Most regional currencies were little changed against the euro in recent weeks amid the beginning of the coronavirus vaccine rollout. However, the Polish zloty weakened as the Central Bank hinted it may cut the key interest rate in the coming quarter. Looking ahead, regional currencies overall are seen recovering some ground as activity picks up.
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5 years of Central & Eastern Europe economic forecasts for more than 30 economic indicators.
Central & Eastern Europe Economic News
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Czech Republic: Economic sentiment strengthens in February amid improved business sentiment
February 24, 2021
The economic sentiment indicator, published by the Czech Statistical Office (CSO), rose to 89.7 in February (January: 87.3). The business confidence index increased in February, coming in at 90.6, from January’s 87.1 reading.
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Hungary: Economic sentiment weakens in February
February 24, 2021
The GKI economic sentiment index, a composite indicator, dropped to minus 19.6 in February from minus 16.3 in January.
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Hungary: MNB stands pat in February
February 23, 2021
At its 23 February meeting, the Monetary Council of the Hungarian National Bank (MNB) decided to keep the base rate unchanged at the all-time low of 0.60%, and also held all other instruments steady, which was in line with market analysts’ expectations. The MNB’s decision to stand pat was due to a resilient economy and sustained price pressures.
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Poland: Business confidence improves in February, but remains pessimistic
February 23, 2021
Business confidence rose to minus 8.3 in February from January's minus 9.9.
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Poland: Industrial output records slowest expansion since June 2020 in January
February 18, 2021
Industrial output expanded 0.9% year-on-year in January (December: +11.1% yoy), marking the weakest expansion since June 2020.
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