Economic developments across Central and Eastern Europe (CEE) reveal a complex landscape as countries navigate inflation and growth forecasts for 2025. Nevertheless, recent data suggests that headline inflation continued to decelerate in April throughout most CEE countries, with the notable exceptions of Romania and Slovenia. Among many other implications, this economic transformation poses questions for central banks’ monetary policies and governments’ growth strategies across the region.
In Hungary, officials look forward to monetary easing in the second half of the year. Romania is planning to loosen its monetary policy. Likewise, Serbia is redirecting resources toward stabilizing its economy. Romania’s approach to easing will heavily depend on its fiscal consolidation plan and its subsequent impact on growth and inflation levels.
Czechia has proven to be a star performer, showing greatly positive growth fundamentals with a year-on-year growth of 2.0% in 2025. Such performance is in line with Poland, which has a solid growth forecast of 3.2% for the same year. Indeed, the GDP forecasts for both Czechia and Poland have held steady, indicating a strong confidence in their respective economic trajectories.
Hungary’s 2025 growth forecast has been downgraded to 0.8%. Similarly, Serbia’s growth outlook has been adjusted to 3.1%, while Slovenia’s forecast has been revised to 1.5%. These revisions call attention to the deepening economic divides among these nations even as the inflationary tide shifts.
Outside of these optimistic projections, we find Romania and Slovakia in a much worse state of economic affairs and their outlook strongly tilted to the downside. This uncertainty has a huge effect on Romania. The forecast for 2025 is for average inflation to be lower than that of 2024, offering a bit of promise about improving economic realities. Moreover, Serbia stands to have a lower implied average annual inflation in 2025 than in 2024.
Czechia is a bright star in the economic firmament. On the surface, it looks like Ethiopia is the only country where the inflation rate remains well below the central bank’s target. This distinction highlights the success of its monetary policies in reducing inflationary pressures while still achieving consistent growth.