Inflation adjusted loan growth positive in all of CEE

On the radar

• Today at 10:00, Poland will release data for industry, PPI and wage growth for August.
• At 10:30, Slovakia will publish July’s current account data.

Economic developments

Today, we turn our attention to the banking sector in CEE, with a particular focus on household loan growth, defined as the annual growth rate of the stock of outstanding loans. As of July 2025, household loan growth in real terms has been observed across all CEE countries. Poland was the last to reach at least 1% real annual growth, primarily due to a lower inflation reading in July. In nominal terms, Poland’s household loan growth stands at 4.1%, the lowest in the region. This is largely due to the prevalence of variable-rate mortgages, which are closely tied to the central bank’s key interest rate. With monetary easing anticipated in Poland, household lending is expected to accelerate in the coming months. Slovakia reports the second-slowest growth in household loans, with a 1.5% increase in real terms and 5.8% in nominal terms. Romania follows, recording a 2.1% y/y increase in real terms. However, this figure is significantly influenced by elevated inflation; nominal growth in Romania reached 10% annually. The strongest household loan growth is observed in Croatia and Serbia. Croatia posted a 9.7% increase in real terms and 13.8% in nominal terms, while Serbia recorded 9.7% real growth and an impressive 14.6% nominal growth.

Market movements

At yesterday’s FOMC meeting, key interest rates were cut by 25 basis points. The vote among FOMC members was 11:1, with only the new Fed Governor, Stefan Miran, advocating for a deeper cut. However, the updated survey of FOMC participants (the “dot plot”) showed that the median expectation for the federal funds rate at year-end fell to 3.6%, down from 3.9% in June. This implies an additional 50 basis points of rate cuts by the end of the year. Following the decision, the US dollar appreciated, moving back below 1.18 against the euro, while CEE currencies weakened slightly. In yesterday’s bond auctions, Czechia raised CZK 2 billion via a 13-year floating-rate note with a 31.8 basis point spread over PRIBOR, and an additional CZK 7.3 billion through a 10-year bond at an average yield of 4.395%. Poland sold PLN 6.6 billion worth of bonds and repurchased PLN 6.4 billion in a bond-switching auction held the same day.

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