CEE Macro Weekly: Calm amid the storm

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TOP MACRO THEME(S):

• Calm amid the storm: why central banks keep their cool (p.3) – Middle East tensions have revived energy shock fears in CEE, though central banks still see room to keep rates stable.

WHAT ELSE CAUGHT OUR EYE:

• ROM: S&P affirmed Romania’s sovereign rating at BBB− with a negative outlook. The rating agency added that the dissolution of the four-party coalition will complicate efforts to reduce Romania’s wide twin deficits — both current account and fiscal — as the 2028 elections approach. Despite the political crisis, S&P highlighted a broad cross-party consensus for further fiscal adjustment in 2027, alongside expectations that a new government will be formed within weeks. Fitch Ratings assessed that the collapse of Romania’s government, together with a deteriorating macroeconomic backdrop, underscores significant risks to the country’s multi-year fiscal consolidation efforts. The agency maintains Romania’s BBB− rating with a negative outlook, reflecting the continued deterioration of public finances due to large fiscal deficits and a rapidly rising government debt-to-GDP ratio.
• HUN: Minister of Economy I.Kapitány said that the fuel price cap may remain in place until 2h26. The announcement follows the recent government decision to release additional fuel supplies from the strategic reserve. According to Secretary General of the Petroleum Association O.Grad, the newly released fuel reserves will last until the end of June. The minister added that the future of the price cap after the current reserves are depleted will depend on the path of global energy prices after June 30.
• CZE: The Ministry of Finance extended the soft cap on fuel prices until the end of May. Maximum petrol and diesel prices are set as the 3-day moving average of wholesale prices, with a maximum profit margin of CZK 3/liter.
• ROM: The National Bank of Romania revised up its inflation forecast to 5.5% in 2026, from 3.9% in the February edition of the Inflation Report. The revision reflects the effects of the war in the Middle East, which has pushed up fuel prices.

THE WEEK AHEAD:

• The key event next week will be the MNB’s decision-making meeting. We do not expect any change in interest rates, as discussed in more detail on page 3. At the same time, the MNB has been the only regional central bank to signal, even after the outbreak of the Middle East conflict, potential room for future rate cuts. We will therefore look for confirmation of this scenario in the post-meeting communication. Earlier in the week, Poland will release a new batch of data, including March retail sales, where the expected decline will largely reflect adverse calendar effects related to the timing of pre-Easter shopping.