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2019/10/11 / Erste Group Research

CEE Special | CEE spreads will remain compressed

Issuance plans met or close to being finished in most CEE countries. Rating developments mostly supportive to yield developments. Spreads over German Bunds mainly stable or decreasing in CEE in 2020.

We see the strongest potential for spread declines for next year in Serbia, Slovenia and Croatia, while spreads could remain roughly unchanged in Poland, Hungary and Romania in 2020. Slight spread increases are expected in the Czech Republic and Slovakia.

Rating developments could also be favorable for several countries. We see potential for rating upgrades in Croatia, Serbia and Slovenia. After the slightly surprising rating upgrade in the Czech Republic by Moody’s on October 4, Croatia could be next in line, as on October 18 we see an upgrade from Moody’s as a likely scenario, since it is now two notches below S&P and Fitch. In 2020, further upgrades for Croatia are also likely.

In the last few years, almost every country in the region managed to notably cut its public debt to GDP numbers and keep the fiscal deficit in check (apart from Romania). This, combined with increases of the average maturity in years of the debt in a few countries, ensures relatively low gross financing needs.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusMacro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia
Currency in focusCroatian Kuna, Czech Koruna, Euro, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-


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