Mixed unemployment developments in CEE

Today we offer a summary of the development in the labor market over the last year. We see quite a mixed performance across the region. In some CEE countries, such as Czechia or Hungary, the unemployment rate has been slowly but continuously rising over the last couple of years. Moreover, these two countries have been struggling with rather meager economic growth since 2022. In 2023, the Czech economy stagnated, while Hungary underperformed in 2024 with GDP growth of 0.5%, the lowest in the region. Czechia, at the top, welcomed the highest number of Ukrainian refugees as a percentage of its population (3.7% since the outbreak of the war). In Croatia, Romania, and Slovakia, on the other hand, the unemployment rate has been declining. In Poland and Slovenia, the average unemployment in 2024 ticked up after decreasing in 2023. Poland and Slovakia are two other CEE countries with a sizeable inflow of Ukrainian refugees as a percentage of the population, yet with no visible deterioration in the labor market as opposed to Czechia. Economic development has been more solid in those two countries as well. All in all, we do not expect the unemployment rates to increase visibly over the course of 2025 as GDP growth is expected to accelerate in most of the region.