Downward revision of 2025 growth

At the beginning of April, we adjusted the growth forecasts in response to the tariff announcement. At that point, the downward revision was rather marginal. The first quarter of 2025 proved to be quite disappointing in several CEE countries. We thus revise our 2025 GDP forecasts accordingly. The biggest revision of growth took place in Hungary, where we slashed our expectations for economic growth to 0.8% this year. GDP growth was also revised down in Serbia (to 3.1% this year),Slovakia and Slovenia (to 1.5% in 2025), as well as in Romania (to 1.3%). Only Croatia, Czechia and Poland experienced solid expansion in the first quarter. Croatia and Poland track GDP growth dynamics close to 3% this year, while Czechias GDP should increase by almost 2%. The uncertainty around tariffs weigh on the growth prospects, however. Slovakia currently faces one of the highest effective tariff rates not only in the region, but in Europe. Further tariff increases, especially for the pharmaceutical sector, would hit other CEE countries to a great extent. Details of our forecasts, as well as inflation and interest rate outlook is discussed in the report CEE Outlook | Reality checks in. GDP revised down.