CEE Macro Weekly: Some cut, others hike, while the rest holds rates steady

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TOP MACRO THEME(S):

• Some cut, others hike, while the rest holds rates steady (p.3) – October inflation data reveal diverging trends. CPI inflation eased in Czechia and Poland but accelerated in Romania and Hungary.

WHAT ELSE CAUGHT OUR EYE:

• POL: GDP grew by 3.5% y/y in 3q26, above our forecast (3.3% y/y) but below market consensus (3.6% y/y), slowing from 4.1% y/y in 2q26. On a seasonally adjusted basis, GDP increased by 3.6% y/y and 0.8% q/q, marking the eighth consecutive quarter of growth. The slowdown in annual growth was mainly driven by a high base, but also reflected a slight moderation in economic activity. Poland remains among the fastest-growing economies in Europe. We expect GDP growth in 4q26 to be no weaker than in 3q26 and maintain our 2026 GDP growth forecast at 3.6–3.7%.
• ROM: GDP increased by 0.1% y/y in 3q26, following a 0.2% decline in 2q26, coming in above market expectations but below our forecast of 0.5% y/y. On a quarterly basis, GDP expanded by 2.1%, the strongest growth since 1q22. The recovery was likely driven by stronger public investment, particularly in RRF-funded projects, alongside improvements in agriculture and the external sector. Private consumption may have contracted less sharply, while industrial activity remained weak. Despite the better-than-expected performance, economic activity remains subdued. We forecast GDP to contract by 0.6% in 2026.
• POL: The current account deficit amounted to EUR 718mn in September, well below expectations (market consensus and PKOe: EUR 2.56bn) and the EUR 3.528bn recorded in August. On a 12-month rolling basis, the deficit narrowed slightly, to 1.3% of GDP from 1.4%. September saw a sharper-than-expected slowdown in goods trade. Goods export growth slowed to 9.7% y/y from 13.5% y/y, while import growth eased to 11.9% y/y from 15.5% y/y. In the coming months, we expect the current account deficit to widen slightly, mainly due to strong domestic demand and a recovery in investment.
• CZE: The current account recorded a surplus of CZK 14.1bn in September, down by 46% y/y, but well above market expectations of CZK 0.2bn. The 12-month rolling current account balance showed a deficit of 0.3% of GDP, its weakest reading in three years, largely reflecting higher energy import costs.
• ROM: The merchandise trade deficit widened by 22.3% y/y to EUR 3.1bn in September, mainly driven by higher imports from non-EU countries, particularly fuels. However, the deficit narrowed slightly compared with August, as import growth slowed. Export growth also moderated, partly reflecting weaker automotive exports. The 12-month rolling trade deficit widened to 8.4% of GDP from 8.3% in August, but remained below the end-2025 level of 8.6%.

THE WEEK AHEAD:

• We expect the MNB to leave interest rates unchanged on Tuesday. Amid elevated geopolitical risks and uncertainty over the inflation outlook, markets will focus on signals regarding the future policy path.
• In Poland, October core inflation is expected to ease to 2.9% y/y from 3.1% y/y, suggesting limited second-round effects. Industrial production growth is likely to slow to 1.6% y/y from 4.6% y/y, mainly due to calendar effects. November consumer confidence should improve, supported by lower fuel prices.