Poland’s and Serbia’s economies visibly outperformed last year

Several CEE countries had flash estimates of 4Q24 GDP data published at the end of the last week. The most dynamic economic development last year was recorder in Serbia and in Poland (3.8% and 2.9%, respectively). Czechia grew by 1.0% while Hungary expanded by 0.5% in 2024. In Serbia, GDP growth has been domestically driven, with robust labor market and real wage gains (around 9% y/y in 2024) supporting household consumption. Meanwhile solid public investment partly reflects preparations for the Expo 2027. Poland's GDP growth for 2024 is expected to be among the highest in the European Union, even amid challenging external conditions and a tendency among Polish households to save a bit more instead of spending. Although Hungarian economy emerged from technical recession at the end of the year, the economic development was likely the weakest in the region in 2024. Czechia experienced gradual recovery and relatively solid performance given the weakness of external environment. We expect Czechia and Hungary to accelerate toward 2% in 2025 while Poland and Serbia should sustain dynamic development. GDP growth should be driven by domestic demand to a great extent (acceleration of investment growth). On the external side, pressures observed in 2024 will likely continue in the mid-term as external demand from Eurozone countries has been weak.