Energy shock reshapes growth and policy outlook in CEE
At a Glance
The desk views the energy shock as a pivotal factor reshaping growth and policy in Central and Eastern Europe, particularly highlighting Poland's resilience compared to the vulnerabilities faced by the Czech Republic and Hungary. Per the full note from ing-think, while Poland shows relative stability, both the Czech Republic and Hungary are grappling with slowing growth and persistent inflation risks, prompting cautious stances from their central banks. Our analysis aligns with the consensus that the region's economic outlook is under pressure, with the potential for further policy adjustments as inflation remains a concern. With no high-impact events on the calendar in the next 30 days, traders should remain vigilant for any unexpected developments in these economies.
Key Takeaways
- 01Poland is relatively resilient to the energy shock; Czech Republic and Hungary face pressure.
- 02Growth slowdown and persistent inflation keep CEE central banks cautious.
- 03Divergence within CEE calls for differentiated FX views.
Full Analysis
What the desk is arguing
The energy shock is creating divergence within CEE, with Poland relatively resilient while the Czech Republic and Hungary face mounting economic pressure. Growth is set to slow across the region, inflation risks persist, and central banks remain cautious.
This analysis distinguishes between the stronger Polish fundamentals—lower energy dependence, more diversified economy—and the more vulnerable Czech and Hungarian positions, where energy costs weigh heavily on industry and households. The desk implicitly rejects the view that all CEE economies will suffer uniformly, emphasizing Poland's relative insulation.
Where it sits in our coverage
Our internal coverage lacks specific CEE currency targets, but this analysis aligns with our broader view that energy-exposed economies face greater macro headwinds. We would expect EUR/PLN to trade with a downward bias (zloty strength) relative to EUR/CZK and EUR/HUF, reflecting Poland's resilience.
ING is the sole firm in our per-firm coverage, and there is no explicit pair mentioned. Therefore, we cannot cite consensus targets or firm-specific data for CEE currencies.
How other firms see it
ING is the source of this commentary, signaling a cautious but differentiated view across CEE. No other firms are cited in the provided data.
No contrary firms are identified in the available coverage.
Market Implications
Expect zloty outperformance vs Czech koruna and Hungarian forint. EUR/PLN may drift lower, while EUR/CZK and EUR/HUF face upside risks from energy-driven current account deterioration.
From the original
CENTRAL AND EASTERN EUROPE: Poland remains relatively resilient, while the Czech Republic and Hungary face mounting pressure as the energy shock deepens. Growth is set to slow, inflation risks persist, and central banks remain cautious
Related speeches
4 itemsCEE: Moving in all directions
Per the full note by ING strategists, CEE economies are diverging in policy paths but share a broadly benign outlook. Poland holds rates steady amid easing inflation and softening growth, while the Czech Republic expands with contained CPI despite cost pressures. Hungary's post-election rally supports an easing bias with scope for summer rate cuts as risk premia fall. No high-impact events are on the calendar in the next 30 days for these jurisdictions.
Webinar reminder: Directional Economics CEE – who breaks, who bends on Energy Shock 2.0
ING's note [source] highlights the asymmetric vulnerability of CEE currencies to a second wave of energy price spikes, arguing that the Czech koruna and Romanian leu are structurally better positioned than the Hungarian forint or Polish zloty. The desk frames the Energy Shock 2.0 as a relative-value play within the region, where fiscal space and energy import intensity determine currency resilience. With no CEE central bank meetings or high-impact data in the next 30 days, the trade relies on exogenous energy supply shocks rather than domestic catalysts. Consensus targets from our coverage align with this bifurcation, though the degree of divergence remains contested.