Look for:


Research Detail

2021/09/13 / Erste Group Research

Are we getting back to normal?

Strong economic recovery is well underway, accompanied by higher inflation what would naturally call for normalization of interest rates. Some statistics have been largely distorted by the base effect and temporal mismatch between demand and supply due to the catching up on one side, and shortages of some intermediate products limiting the production side.

Serbia, Romania, Poland and Hungary have already reached their pre-COVID levels in real GDP and the rest of CEE should achieve that in the next few quarters. The uptick in 2Q21 was mostly driven by rejuvenation of household consumption and investment, whereas net exports marked a more split performance due to the consumption- and investment-driven revival of imports. Overall, robust and resilient labor markets, together with the gradual release of pent-up demand remain supportive of further improvements, especially in household consumption. Even though pick-up in investment lags behind in some countries, the region is soon to benefit from large fund inflows from the EU, courtesy of not only the standard EU funds but also the Next Generation EU recovery plan. Yet, the impact of the latter is expected predominantly from 2022 onwards. Overall, we expect the CEE8 region to mark robust economic growth of 5.7% this year, followed by another strong increase of 5% in 2022. Needless to state, risks related to COVID-19 and supply chain strains remain.

We believe that strong growth and rather high inflation (albeit at a lower level than now) will stay with us also next year, justifying the start of monetary tightening in CEE. In the following months, Czech and Hungarian central banks will continue in their tightening cycles. Romanian central bank should start lifting rates in November while Poland’s central bank will postpone its first rate hike to 1Q22 or even later.

PDF Download Download PDF (588kB)

General information

AuthorErste Group Research
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE
Currency in focus-
Sector in focus-


We use cookies and web analysis software to give you the best possible experience on our website. If you consent, these tools will be used. For more details please read our Data protection policy.


Any information, material and services regarding financial instruments and securities provided by Erste Group Bank AG or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites”) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions (the “Interested Party“).

The publication and distribution of information as well as offering and selling of products and services described on the Websites is prohibited by law in some jurisdictions. For this reason, persons in countries in which the publication as well as the offering and selling of products and services described on the Websites are not permitted by law, must not enter the Websites and/or acquire the products displayed on the Websites.

Neither Erste Group nor any third party shall offer access to the Websites or offer the products to especially, but not limited to citizen/residents of the United States and “U.S. person” (as defined in Regulation S under the US Securities Act 1933 as amended), citizen/resident of Australia, Canada, Great Britain and Japan. For this reason, the distribution or redistribution of the information, materials and products into United States, Australia, Canada, Great Britain and Japan or into any other jurisdiction where it is not permitted under the applicable law, as well as to the citizens/residents of these countries shall be prohibited.

The securities displayed on the Websites have not been and will not be registered under the US Securities Act of 1933 and trading in the securities has not been approved for purposes of the US Commodities Exchange Act of 1936. For this reason the securities may, inter alia, not be offered, sold or delivered within the United States or, for the account and benefit of U.S. persons.

The Interested Party is solely responsible to examine, whether he may enter the Websites under the law applicable to it. Erste Group shall not be responsible for the distribution of content of any of the Websites to individuals or entities which provide false information about their right to enter the Websites. For this reason Erste Group shall not be liable for any legal claims or damages which may result from the unauthorized entering or reading of the Websites.

By agreeing to this hereto, the Interested Party confirms that
(i) It has read, understood and accepted this Information and the Disclaimer;
(ii) It informed itself about any possible legal restriction and warrants that it is not restricted or prohibited to enter the Websites according to any law applicable; and
(iii) It does not make available the contents of the Websites to any person who is not qualified by law to enter the Websites.
(iV) It is no consumer.