Economic performance across Central and Eastern Europe (CEE) presents a complex picture as the region approaches the third quarter of 2025. Hungary, Slovakia, and Slovenia have all felt substantial industrial contractions since the beginning of the year. Romania faced significant difficulties early this year. It is finally on the mend, at least, which points to some hopeful signs of a broader economic turnaround.
Nationally, in Hungary the industrial recession has proven much deeper than expected throughout 2025, fitting the nation’s deep economic crisis. In the same vein, Slovakia has already announced a decline in its industrial production, showcasing the strain on its manufacturing industry. Slovenia has followed on this path as well, adding to a quite alarming trend within the region.
Romania’s Path to Recovery
After a difficult early 2025, Romania began to demonstrate signs of improvement in the third quarter. This worry was compounded by the country’s high performance in the first half, which created fears over its long-term economic stability. According to a few recent reports, Romania’s industrial sector is starting to recover as the third quarter continues.
Local analysts have pointed out that this recovery might be a harbinger of what’s happening, or soon will, in the rest of the region’s economy. Romania is currently forging ahead and working through the challenges of its industrial ecosystem. We hope that this journey will provide a roadmap for other countries facing these same perils and promise.
Inflation and Employment Data
Regardless of governments’ borrowing proclivities, as the economic landscape continues to shift, inflation data will be key in assessing each country’s financial well-being. Hungary is set to release its inflation data on October 1st at 8:30 AM CET, while Czechia will follow with its inflation details at 9:00 AM CET. These reports may weigh heavily on future monetary policy decisions in each country.
In Czechia, the unemployment rate as of March 2023 is unchanged at 4.6% YoY indicating a resilient labor market amid shifting economic tides. We hope this newfound stability in employment levels will serve as a shock absorber should a recession hit. At the same time, Croatia’s producer prices are up by 1.3% yoy in October, signalling that inflationary pressures remain strong.
Retail Sector Performance
Unlike the current battles in the manufacturing sectors, the retail scene across CEE looks considerably calmer. Retail growth in Czechia has been about 2% to 2.5%, about the same in the case of Croatia and Hungary. This expansion further indicates that consumer spending is holding up well even as other parts of the economy begin to crack.
The retail action in these countries are often the best early indicators of U.S. consumer confidence and spending habits. This data will be key to ensuring these projects are driving broader economic recovery. Poland’s central banker Dabrowski was adamant that interest rates can be cut further. Passing such a measure would greatly enhance consumer confidence and spur new investment in the retail industry.