Serbia's central bank convenes today for a critical rate-setting meeting, as the region's economic landscape remains a focal point of discussion. The meeting comes amidst revelations that industrial production contracted in 2024 across most Central and Eastern European (CEE) countries. However, the contraction was less severe compared to 2023 in Czechia, Hungary, Romania, and Slovenia. Notably, only Poland, Slovakia, and Serbia experienced industrial expansion last year.
Romania's release of December's industrial output growth marks the culmination of data reflecting the industry's performance in 2024. This data paints a picture of a region grappling with global economic forces. The homogeneity in the region's industrial output downturn is attributed to global factors, with EU and US economic data remaining pivotal. Trade tensions have also begun to encroach upon Europe, exacerbated by former President Trump's 25% import tax on steel and aluminium entering the US.
Financial markets reflect these economic currents, with EURPLN standing at 4.16 and EURHUF at a low of 401. Meanwhile, EURCZK has edged towards 25.05. Analysts note that long-term yields have trended higher since the beginning of the week, adding another layer to the ongoing economic narrative.
In currency markets, GBP/USD maintains a bullish momentum, trading near 1.2500 in the European session on Thursday. Simultaneously, EUR/USD exhibits moderate gains, trading above 1.0400. These movements underscore a cautious optimism amidst the broader economic challenges faced by the CEE region.