As the newest Central and Eastern European economic reports continue to roll in, the picture remains decidedly mixed. Serbia, Slovenia, Croatia, Romania, Czechia, Hungary, and Poland have all been busy making bigger strides. .imagetag Serb Press Photo The Serbian economy registered a robust growth rate of 2.0% year-on-year and Slovenia saw inflation rate rise to 2.3%. In Croatia, retail sales increased by 3.6% yoy in March. At the same time, industrial activity grew by a whopping 3.0%. These numbers are in line with more global trends from the Eurozone and the EU as a whole.
In Q1 2025, the Euro area’s seasonally adjusted real GDP grew by 0.4 percent from the prior quarter. This expansion represents an annualized growth rate of 1.2% year over year. Likewise, the EU’s GDP grew by a quarterly 0.3% and an annual 1.4%. It is this broader context that accentuates the contrasting economic fortunes that exist even within countries.
Growth and Challenges in Serbia
So far, Serbia’s economy has proven resilient with one of the strongest growth performance in the region of 2.0% y-o-y. The country’s retail sector came to a standstill in March, signaling all is not well with Chinese consumer spending. The industrial sector, by contrast, showed clear strength, growing 6.9% YoY.
Upsides Industrial growth bodes well for robust manufacturing and production capacity Despite this continuing success, the stagnation in retail suggests a future in which headwinds threaten to blow away any growth prospects.
Regional Inflation and Retail Trends
Slovenia’s year-on-year inflation increased to 2.3%, a sign of the regional trend of increasing inflation which has plagued most economies across the region. In aggregate, this decline will shape how Slovenia’s consumers behave and spend going forward. Meanwhile, Poland recently announced a drop in its inflation rate down 4.2% y-o-y in April. This swing indicates that inflationary pressures might be letting up.
Croatia still showing some of the best retail stats on the continent, retail sales up 3.6% YoY. In March, Croatia’s industrial sector expanded by 3.0%. This is a strong sign that consumer demand is growing, and that’s boosting manufacturing output.
Performance of Eurozone Economies
In Q1 2025, the Eurozone was experiencing calm economic expansion. That still left it with a seasonally-adjusted GDP increase of 0.4% on the previous quarter and growth of 1.2% year-on-year. The whole EU joined this trend, with 0.3% quarterly growth. On an annualized basis, it saw a strong cross-annual growth rate of 1.4%.
Czechia followed suit with impressive economic performance of 0.5% q-o-q and 2.0% y-o-y growth. In contrast, Hungary was hit hard by the economic backlash, exhibiting a contraction of -0.2% on a quarterly basis and -0.4% in year-on-year terms.
Romania’s manufacturing PMI at 48.3 This pullback across the manufacturing sector has economists worried about what their latest index suggests is a looming poorer overall economic performance for our country.