Romania’s last politically meaningful progress report, produced under duress, to the European Commission and thereby Romania’s last step towards obedience under the European Commission’s Excessive Deficit Procedure. The report outlines Romania’s approach to achieving a short-term (2026) very ambitious consolidation target of 2.4pp. Most importantly, it seeks to reduce the annual budget deficit from 8.4% of GDP in 2025 to 6% by that year. This ambitious plan is a clear signal of the Romanian government’s commitment to fiscal discipline in the face of continuing economic headwinds.
Poland has recently demonstrated a much more positive economic outlook, with several indicators pointing to a strong growth path. That’s how Poland’s Ministry of Finance felt when it was forced to sell bonds worth PLN 12.0 billion at its main auction. They further raised an additional PLN 363 million through a secondary offering. All of this activity is a testament to the confidence these investors have in the economy of Poland.
Economic Performance in Poland
Poland’s economic data for September showed robust industrial production, up 7.4% YoY. This vigorous expansion is clear evidence that our manufacturing and production sectors are recovering strongly. Poland had particularly high retail sales, up an incredible 6.4% year-on-year. That’s a huge leap from the 3.1% increase recorded in August. Consumer spending is a major driver of our economy and these figures show a healthy positive trend that boosts economic vitality across the country.
The Polish labor market see sanded positive signs of momentum, with the unemployment rate settling at 5.6% in September. This relatively low unemployment figure indicates resilience in job creation and suggests that the Polish economy is managing to absorb workers amid ongoing global economic pressures.
Regional Currency Trends
For example, this week the Czech koruna and Hungarian forint have weakened slightly against the euro. As a result, real regional currencies still struggle to gain traction on the foreign exchange market. The Polish zloty has appreciated against the euro. This change has been more than offset by a divergent performance in the currency markets among the members of Central Europe. This swing could be due to the changing economic climates and capital markets sentiment throughout the region.
Serbia will release its real wage growth numbers for August today at 12:00 CET. This is a timely release that will help paint a more comprehensive picture of the economic outlook for Southeast Europe, while offering important insights into consumer purchasing power.
Upcoming Economic Indicators
Economic indicators are right around the corner. And for one mystery country, we should get a flash GDP release on November 13. This announcement has the potential to raise the curtain on how different parts of the region are growing. Romania is looking at a deeply alarming month-on-month decrease of 0.6% in its seasonally adjusted numbers. The specific economic indicator that is causing this unprecedented decline is unclear.