CEE Macro Weekly: Spooky slowdown

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TOP MACRO THEME(S):

• Back in the band (p.3) – The return of inflation to the NBP’s tolerance band and the decline in core inflation in October are important arguments for the MPC to keep interest rates unchanged at the meeting on 3–4 November.

WHAT ELSE CAUGHT OUR EYE:

• CEE: Flash GDP estimates for 3q26 point to slowing economic growth in some CEE economies. Hungary’s economy expanded by 1.5% y/y, down from 1.7% y/y in 2q26 and below consensus expectations of 1.8% y/y. Quarterly growth slowed sharply, to just 0.1% from 0.6%, suggesting that the recovery is losing momentum. Despite new manufacturing capacity, personal income tax cuts and higher government spending, growth remained subdued, albeit stronger than in recent years. Solid performance in manufacturing and services has been partly offset by agricultural weakness, largely driven by severe droughts. In Czechia, GDP growth eased to 1.6% y/y (sa) from 1.8% y/y, in line with expectations. Household consumption and net trade supported activity, while investment remained a drag. Manufacturing, trade and transport, ICT and professional services were the main contributors to annual growth. The outlook remains broadly positive, although further momentum will depend heavily on external demand, particularly on the recovery in Europe’s automotive industry.
• POL: Household savings rate has reached its highest level since the pandemic, at 10.1% on a rolling four-quarter basis in 2q26, up from 9.5% in 1q26. This is the highest level since 2020-21, when savings were boosted by pandemic-related restrictions on consumption. Nominal disposable income growth accelerated to 9.0% y/y from 6.2% y/y, while real disposable income growth picked up to 5.9% y/y from 4.5% y/y in 1q26. Both measures improved despite accelerating inflation and slowing wage growth. The main positive surprise came from a sharp acceleration in property income growth, including dividends and profits distributed to business owners. In our view, these trends confirm the resilience of Polish households, which appear able to sustain consumption growth while continuing to build up savings and wealth.
• ROM: The Romanian National Commission for Strategy and Prognosis (CNSP) has lowered its GDP growth forecast for 2026 to −0.4% from a previous 0.1%, and for 2027 to 1.7% from 2.2%. The commission has also raised its inflation forecasts – for 2026 it now expects 6.4% (up from 5.3%), and for 2027, 3.4% (up from 3.0%).

THE WEEK AHEAD:

• Central banks in Poland and Czechia will take centre stage this week. Poland's MPC (Wed.) is likely to keep its policy rate at 3.75%. Key for future decisions will be A.Glapinski's press conference (Thu.) and the new NBP projections, particularly the outlook for core inflation. The CNB (Thu.) may raise its policy rate by 25bp from 3.75%, given its hawkish stance and concerns about second-round inflation effects.
• S&P will review Poland's sovereign credit rating (Fri.). We expect no change (“A−“, stable outlook), supported by slightly better fiscal data for 2q26 and fiscally neutral tax reform proposals.
• Other releases include regionwide manufacturing PMIs (Mon.) and industrial production and retail sales data from Hungary and Czechia (Wed.–Fri.).