CEE Macro Weekly: More or less cautious doves

TOP MACRO THEME(S):

• Poland’s housing market stabilizing at a lower equilibrium (p.3) – Although transaction prices for residential properties in Poland’s major cities remained largely unchanged y/y in 1q26, we expect a modest increase in average transaction prices over a one-year horizon.

WHAT ELSE CAUGHT OUR EYE:

• POL: Poland’s Monetary Policy Council left interest rates unchanged (the reference rate at 3.75%), in line with both our expectations and market consensus. The Council reviewed updated projections of NBP staff for GDP and inflation. According to the central scenario, average CPI inflation will reach 2.9% in 2026 and 2.8% in 2027. In the near term, inflation will remain relatively high but stay within the target tolerance band. Starting from 3q27 it should be back at around 2.5%. During the press conference, NBP Governor A.Glapinski described sentiment within the MPC as moderately dovish. He added that he is personally less cautious than most of Council members and did not rule out a 25bp interest rate cut this year. In our view, the MPC might underestimate the scale of inflation rise in 2026, and the expected inflation path creates room for rate cuts only in mid-2027.
• ROM: The National Bank of Romania left interest rates unchanged, in line with expectations. The key policy rate stands at 6.50% and has been kept at that level since August 2024. Interest rates in Romania remain the highest in the CEE region, but the still-elevated level of inflation − which stood at 10.85% y/y in May − continues to preclude rate cuts for the time being. The central bank expects inflation to ease slightly in June and to decline more markedly in 3q26, mainly due to base effects − namely, the fading impact of the removal of electricity price caps and the increase in indirect taxes introduced as part of fiscal consolidation. We expect the NBR to keep interest rates unchanged in the coming months, with limited room for a 25bp cut emerging in 4q26, provided that underlying inflationary pressures indeed moderate.
• POL: The registered unemployment rate fell to 5.8% in June from 5.9% in May. The preliminary estimate from the Ministry of Labour was in line with market expectations. The number of unemployed persons in June stood at 903k, down by 13.2k compared with May. Last year, the number of unemployed increased at this time of the year due to the reform of labour offices, but this year’s decline was slightly smaller than that usually observed in June in previous years. The increase in the seasonally adjusted unemployment rate observed since the beginning of 2026 reflects a significant reduction in financing for activation programmes and does not indicate a deterioration in labour market conditions.

THE WEEK AHEAD:

• This week, the key releases will be the June inflation data from the CEE region − Poland’s final CPI reading and inflation figures from Romania. In the former case, we expect confirmation of the decline in inflation to the 2.5% target, while in the latter inflation may also have eased, but is likely to have remained in double digits.
• Regional balance of payments data for May will show the impact of the sharp rise in crude oil prices on the countries’ external balance.