{"id":87562,"date":"2025-05-09T14:22:12","date_gmt":"2025-05-09T14:22:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/87562\/"},"modified":"2025-05-09T14:22:12","modified_gmt":"2025-05-09T14:22:12","slug":"bne-intellinews-comment-central-europes-diverging-economic-paths-challenge-regional-policy-synchronisation-ing","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/87562\/","title":{"rendered":"bne IntelliNews – COMMENT: Central Europe\u2019s diverging economic paths challenge regional policy synchronisation \u2013 ING"},"content":{"rendered":"

The economic trajectories of Central and Eastern European (CEE) countries are drifting apart, with growth, inflation\u00a0and policy direction showing increasing divergence. According to a recent\u00a0commentary<\/a>\u00a0by ING, Poland and the Czech Republic are outperforming expectations, while Hungary and Romania continue to lag behind, creating a fragmented regional outlook.<\/p>\n

Poland<\/strong>\u00a0remains the region\u2019s strongest economy, with inflation decelerating and monetary policy set to shift. \u201cLower-than-expected CPI inflation in the first quarter of the year, slowing core inflation, easing wage pressure and probably softer annual GDP growth… all bolster the argument for the adjustment,\u201d ING analysts said. With CPI falling to 4.2% in April and forecast to reach around 3% by July, the National Bank of Poland is expected to cut interest rates by 50bp in May.<\/p>\n

Policymakers are also delaying household energy tariff approvals until late 2025, aiming to lock in lower prices amid declining wholesale electricity costs. ING sees the policy rate falling to 3.75% by end-2026, with a more gradual pace of cuts following an initial adjustment. “Markets have priced aggressive and frontloaded cuts in \u2013 so a potential pause in June… could trigger a rebound in PLN yields,” the bank noted.<\/p>\n

In the\u00a0Czech Republic<\/strong>, strong consumer spending continues to drive the recovery. \u201cConsumers are still king, with their budgets benefiting from tamed inflation and nominal wage increases,\u201d ING stated. Residential construction is booming, while industrial confidence remains fragile due to weak German demand and global trade tensions. The Czech National Bank is expected to cut its policy rate to 3.25% by summer, though elevated core inflation may limit further easing.<\/p>\n

\u201cHungary<\/strong>,\u201d ING said, \u201cfaces the prospect of yet another technical recession,\u201d marking the third year of repeated economic disappointment. The bank points to a sharp drop in GDP in the first quarter and structural weaknesses, including collapsing investment and weak external demand. While consumption offers some support, inflation has declined due to government price controls and lower oil prices. ING now expects 2025 GDP growth of just 1.2%, down from 1.9%. It forecasts no further rate cuts this year but warns that weaker-than-expected inflation or growth could bring easing forward.<\/p>\n

The\u00a0Hungarian forint<\/strong>\u00a0is expected to weaken, with ING predicting a return to the EUR\/HUF 410\u2013420 range. This reflects “rising expectations of monetary easing, but also… rising fiscal concerns and the elevated risk of negative credit rating actions.”<\/p>\n

Romania<\/strong>\u00a0is set for modest recovery, with GDP growth forecast at 1.2% in 2025, helped by investment, healthy consumption, and infrastructure improvements. However, the post-election political environment introduces new uncertainty. \u201cRisks to the outlook stem from scenarios of weaker-than-expected consumption and potentially tougher financing conditions,\u201d ING warned.<\/p>\n

While the National Bank of Romania is seen maintaining a cautious stance in the near term, 50bp of rate cuts may still come in the second half of the year. ING expects a fiscal deficit of 7.0% in 2025, improved from 8.6% in 2024, but warns this outlook hinges on better revenue collection and political stability.<\/p>\n

\u201cWe\u2019ve seen divergence beginning to widen across Central and Eastern Europe,\u201d ING said. \u201cThere is more divergence in the direction of inflation, as well as monetary and fiscal policy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The economic trajectories of Central and Eastern European (CEE) countries are drifting apart, with growth, inflation\u00a0and policy direction…\n","protected":false},"author":2,"featured_media":87563,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5174],"tags":[31993,37437,2000,299,5187,41863,770,1438],"class_list":{"0":"post-87562","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eu","8":"tag-bne","9":"tag-business-new-europe","10":"tag-eu","11":"tag-europe","12":"tag-european","13":"tag-hungary-czech-macroeconomics","14":"tag-poland","15":"tag-romania"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114478326954359561","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/87562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=87562"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/87562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/87563"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=87562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=87562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=87562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}