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 itemsWebinar 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.
Webinar: Directional Economics CEE – who breaks, who bends on Energy Shock 2.0
The desk anticipates that Central and Eastern Europe (CEE) will face significant challenges due to the projected 2026 oil shock, as highlighted in the recent ING webinar announcement. Per the full note [source], the discussion will delve into the implications of political shifts in Hungary and Poland, and the potential policy missteps by CEE central banks in response to inflationary pressures. This scenario suggests a heightened risk for regional currencies, particularly if inflation continues to outpace expectations. With no immediate high-impact events on the calendar, traders should prepare for volatility as the region navigates these economic headwinds.
Czech industrial prices rebound as supply shock takes hold
ING Economics argues that Czech industrial producer prices have rebounded, reflecting the tightening supply shock gripping the economy. Per the full note [source], the PPI print shifted from contraction to 0.8% YoY growth, driven by energy and intermediate goods costs. This supply-side pressure complicates the CNB's easing cycle, as it risks second-round inflation effects. The desk sees a hawkish tilt in the koruna's forward profile, though our internal coverage lacks specific firm forecasts on EUR/CZK. With no major calendar events ahead, the focus remains on the CNB's May policy meeting.
Czech industrial prices rebound as supply shock takes hold
The Czech Republic's industrial price rebound, driven by increasing energy and input costs, signals a shift in the economic landscape that may limit future monetary policy tightening. Per the full note from ing-think, the rise in production prices could have detrimental effects on overall economic performance, underscoring the emerging divide between various economic sectors. As inflationary pressures mount, the Czech National Bank (CNB) may find it challenging to maintain a hawkish stance, particularly with inflation already at 2.9% as of August and expected to remain elevated due to ongoing energy supply issues. The lack of significant economic events on the calendar in the coming weeks further compounds this situation, potentially leaving traders in a holding pattern while assessing the impact of these rising costs on the koruna's value.
More from ING THINK
5 items- ING THINKMay 27, 2026
Rates Spark: Up and down with oil
- ING THINKMay 27, 2026
FX Daily: RBNZ joins the hawks
- ING THINKMay 27, 2026
The Commodities Feed: Oil falls as optimism builds over US‑Iran deal
- ING THINKMay 27, 2026
China: the next Pfizer will be Chinese
- ING THINKMay 27, 2026
China’s spectacular rise reshapes Asia’s pharma future