3Q23 GDP growth in Slovakia was confirmed at 1.1% y/y.
In Romania, the PPI index landed at -2.2% y/y.
Today, retail sales growth for October will be released in the Czech Republic, Hungary, Romania and Slovakia.
Hungary will also release industrial production.
Poland is expected to keep its key rate unchanged.
Economic developments
In October 20/23 industrial producer prices rose by 0.2% m/m in both the euro area and the EU, while in year-on-year terms industrial producer prices fell by 9.4% in the euro area and by 8.7% in the EU. In the region, producer prices fell by -0.2% m/m (CEE8 average) in October. Looking at individual countries, producer prices declined in most of them, except for Poland, Romania and Slovakia, where producer prices were higher in October 2023 compared to the previous month. Over the last two years, production costs have increased tremendously, but after years of a more sideways trend (between 2015 and 2020). Currently, producer prices are 73% higher compared to 2015 (producer price index in CEE8 was 172.9 in October 2023).
Market developments
As for the CEE currencies, the Czech koruna and the Hungarian forint weakened since the beginning of the week, while the Polish zloty appreciated slightly against the euro. On the bond market, we see a continuation of the decline in yields as inflation continues to fall and market expectations for the start of monetary easing by the major central banks are shifting. The Polish central bank is expected to keep its key rate unchanged. More interesting news came from S&P, which suggested that Poland’s credit rating could benefit from the release of EU funds. In Slovakia, the government plans to impose the 30% additional tax on banks to improve tax revenues and reduce the budget deficit next year.
