Q1 growth data mostly disappointed

Apart from Croatia, all other CEE countries published 1Q25 flash GDP data. Unfortunately, there were more unpleasant surprises than good news. Only Czechia and Poland expanded in line with expectations and with solid growth dynamics (2.0% y/y and 3.2% y/y accordingly). The rest of the region grew at a much slower pace or not at all. In q/q terms, Hungarian economy contracted, while Romanian economy stagnated. That translated into no growth in annual terms in Hungary and meager 0.2% y/y expansion in Romania. Slovenias GDP declined by -0.7% y/y - first negative growth rate since 4Q20. Serbia and Slovakia grew in annual terms, yet the growth dynamics fell short of expectations. All in all, we already slashed the growth forecasts in Hungary (to 0.8% in 2025) and in Serbia (to 3.1% this year) while in Romania, Slovenia or Slovakia the risks remain skewed to the downside. The structure of the GDP will be published only at the end of May and beginning of June.