The economic calendar for Central and Eastern Europe (CEE) is packed this week, with multiple countries poised to release their fourth-quarter GDP data, providing insights into regional economic health. The spotlight will be on Romania and Serbia, with central bank meetings expected to maintain current policy rates. Additionally, Fitch will review Czechia's credit rating, while Hungary and Slovenia gear up to sell T-bills. Notably, Romania recently raised substantial funds through Eurobond issues in both euros and dollars.
At the end of this week, the release of fourth-quarter GDP data from several CEE countries will provide key insights into the region's economic performance. However, Croatia will stand out as the only nation to publish its GDP data at the end of February. This data is crucial as it will offer a clearer picture of the economic trajectory for these nations heading into 2024.
Fitch's scheduled review of Czechia’s rating and outlook marks another significant event. This review holds potential implications for the country's borrowing costs and investor confidence. In parallel, Hungary and Slovenia plan to enter the capital markets with T-bill sales aimed at managing their short-term debt obligations.
Romania has made a notable move by borrowing EUR 2.8 billion through a multi-tranche Eurobond issue spanning five and nine years. The country also secured USD 1.25 billion through a 12-year dollar-denominated Eurobond. This strategic financial maneuver reflects Romania’s efforts to consolidate its fiscal position amid fluctuating global economic conditions.
In the bond market, CEE government bond yields have generally moved downward over the past week. Romania experienced the most significant drop, with a 30 basis point decline in the 10-year segment. This trend indicates positive investor sentiment towards Romanian bonds during this period.
Central bank activities remain a focal point, with neither Romania nor Serbia expected to alter their key policy rates in upcoming meetings. Similarly, Poland's central bank decided to keep its policy rate unchanged, aligning with Governor Glapinski’s stance that there is currently no room for rate cuts. The Czech central bank, however, lowered its key policy rate to 3.75% last week in response to easing inflation pressures.
Foreign currency markets observed a strengthening of CEE currencies against the euro over the past week, reflecting improved regional economic sentiment. Croatia also tapped into foreign markets by borrowing EUR 2 billion via a 12-year Eurobond, while Poland raised USD 5.5 billion through a dual-tranche dollar-denominated Eurobond issuance covering five and ten years.
This week, Romania plans to reopen its government bonds maturing in 2030 and 2038, while Czechia, Hungary, and Poland are set to offer various bonds to investors. These activities are part of broader efforts by these nations to manage their national debts effectively.
Several economic indicators are also on the horizon. December’s industrial output growth figures are expected from Slovenia and Romania, providing insights into manufacturing sector performance. Wage growth data will be released in Slovakia and Romania, offering a glimpse into consumer purchasing power trends. Additionally, trade data from Poland and Romania will shed light on export-import dynamics.