CEE Macro Weekly: Swinging moods in the CEE

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TOP MACRO THEME(S):

• March thaw in the economy (p.3) – Poland likely saw a milder-than-feared slowdown in 1q26, with GDP growth around 3.4% y/y, as March activity data rebounded strongly after weather-related disruptions earlier in the year.

WHAT ELSE CAUGHT OUR EYE:

• ROM: The rupture within the governing coalition began after the centre-left Social Democratic Party (PSD) withdrew its support for Prime Minister I.Bolojan of the centre-right National Liberal Party (PNL) over the scale of spending cuts. As a result, the prime minister lost his parliamentary majority, and PSD ministers submitted their resignations. The PSD has announced that it is prepared to participate in the formation of a new pro-European government and to support either a political or technocratic prime minister who is responsive to citizens’ concerns and capable of cooperating with the parties needed to secure a parliamentary majority. Meanwhile, the prime minister is facing a no-confidence vote early next week, backed by the PSD and G. Simion’s nationalist Alliance for the Union of Romanians (AUR). According to Politico’s Poll of Polls, support for AUR stands at 35%, well above the Social Democrats in second place at 20%.
• HUN: The Tisza Party secured a landslide victory and constitutional majority, winning 141 seats in the 199-member parliament, according to final results published by the National Election Commission. The outgoing Fidesz party will hold 52 seats. Prime minister-designate Péter Magyar said the new government would consist of 16 ministries. András Kármán, a key architect of Tisza’s flagship wealth tax proposal, is set to become finance minister. István Kapitány, a former Shell executive with 37 years of experience, will head the merged economy and energy ministry.
• HUN: The LFS unemployment rate for the 15–74 age group rose by 0.2 pp y/y to 4.5% in March, but fell by 0.3 pp m/m, slightly more than implied by the usual seasonal pattern. Labour demand remained weak, with employment down by 1.2% y/y in March. The decline in employment eased somewhat compared with January and February. This year’s weakness may be related to the steep 11% increase in the minimum wage.
• POL: The registered unemployment rate remained at 6.1% in March, Statistics Poland reported, thereby confirming the estimate published by the Ministry of Family, Labour and Social Policy at the beginning of April.

THE WEEK AHEAD:

• This week will bring several important macroeconomic releases from the CEE region. In Poland, the flash CPI estimate due on Thursday is expected to show that inflation in April remained close to its March reading of 3.0% y/y. In Hungary, the MNB is likely to leave interest rates unchanged at Tuesday’s meeting, while on Thursday the first GDP estimate for 1q26 is expected to show growth accelerating from 0.8% in 4q25. In Czechia, by contrast, GDP growth likely slowed slightly from 2.7% y/y in 4q25 to around 2.5% y/y in 1q26.