Q3 growth figures weaker than anticipated

Economic growth in the third quarter surprised the most to the downside in Hungary and in Romania. Hungarian economy contracted, while Romanian expanded by 1.1% y/y, well below the expectations. In both countries we have already revised the 2024 growth forecast downwards to 0.5% and 0.8%, respectively. In Romania, high-frequency indicators suggest that consumption decelerated in Q3 2024. In Slovakia, flash 3Q24 GDP was also disappointing at 1.2% y/y as opposed to expectations of expansion close to 2%. In Serbia, economic growth was solid at 3.1% y/y in 3Q24 (though below our expectations as well) and we expect Serbia to expand by 4% in 2024, the most within CEE region. In other countries (Czechia, Poland, and Slovenia) the flash estimates were mostly in line with market consensus as far as year-on-year growth dynamics are concerned. Polish economy, however, unexpectedly contracted in the quarter-on-quarter terms as flash 3Q24 landed at -0.2% q/q. In general, the economic recovery has been weaker than initially anticipated. The external environment and in particular the German economy has been sluggish, reducing the impulse for recovery steaming from the domestic development. The GDP structure will be published at the end of November and beginning of December but downside risks for growth outlook prevail.