Economic Snapshot for Central & Eastern Europe
March 10, 2020
Central & Eastern Europe growth to lose traction in 2020
The regional economy should lose traction this year, although growth should remain healthy nonetheless. A weak Eurozone, intensifying supply-side constraints and the EU funding cycle will restrain investment and exports, while slower employment growth will limit consumer spending. Trade policy uncertainty and coronavirus spillovers pose the main downside risks.
CEE Monetary & Financial Sector News
Regional inflation came in at 3.8% in January, increasing from December’s 3.3% reading. Inflation is set to remain largely stable in 2020 compared to last year as lower energy prices should broadly offset upside price pressures stemming from solid wage growth and tightening capacity constraints. Covid-19 presents both upside and downside risks to inflation ahead.
Central banks in Hungary and Poland stood pat at their latest meetings, despite heightened downside risks related to the coronavirus outbreak. Cooling economic activity, a frail Eurozone economy and the ECB’s loose monetary policy stance drove their decisions. Rates should remain broadly unchanged ahead, barring upside inflation surprises or disruptions linked to coronavirus.
Over the last few weeks, local currencies lost ground against EUR, largely on market jitters over how the coronavirus could impact the global economy. The downside movement was partly cushioned by the Fed’s decision to cut rates, which reinforced hopes of a monetary response of central banks.
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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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Croatia: Industrial production contracts again in February
March 31, 2020
Industrial production fell 2.1% in working-day adjusted terms over the same month last year in February, a softer drop than January’s 5.5% dive.
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Slovakia: Center-right coalition takes office in the midst of Covid-19 crisis
March 27, 2020
On 21 March, President Zuzana Caputova swore in the new center-right coalition government, led by Igor Matovic from the Ordinary People and Independent Personalities (OLANO) party, which won over one-third of parliamentary seats in the 28 February election on an anti-corruption platform.
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Czech Republic: CNB cuts rates for second time in less than two weeks in March
March 26, 2020
At its meeting on 26 March, the board of the Czech National Bank (CNB) unanimously decided to slash the two-week repo rate by 75 basis points to 1.00%, which follows the 50 basis points cut already delivered at the extraordinary meeting held on 16 March.
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Poland: Coronavirus fears sap business sentiment in March
March 24, 2020
Manufacturing-sector business confidence lost ground in March, dragged down by concerns associated to the economic impact of coronavirus, according to the business tendency indicator released by Statistics Poland.
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Czech Republic: Economic sentiment slides to over six-year low in March
March 24, 2020
The economic sentiment indicator, published by the Czech Statistical Office (CSO), dipped for the third month running to 94.4 in March (February: 97.6), marking the lowest reading since October 2013.
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