Omnibus: EU Deregulation – It Can Only Be the Beginning!

Jörg BAYER MARCH 06, 2025 17:40 CET

The initial draft of the deregulation effort is, in our view, hopefully just the beginning—there remains a considerable gap between the current state and the ambitions of the Budapest Declaration, which calls for a true simplification revolution. The Omnibus package introduces notable improvements, but the real challenge lies in its implementation and whether it effectively incentivizes large companies to invest in Europe. A critical question the EU has yet to address is where its strategic competitive advantage truly lies. Regulatory burdens, bureaucratic complexity, and persistently slow political decision-making—obstacles that remain even after Omnibus—are unlikely to provide the answer.

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ECB Watch: Monetary policy meaningfully less restrictive

Franz ZOBL MARCH 06, 2025 16:33 CET

As expected, the ECB cut interest rates by 25 basis points today. However, monetary policy is now seen as “meaningfully less” restrictive, making the further key rate path less certain. The ECB emphasized its data-dependent approach and held out the prospect of either a rate cut or a pause at the next meeting in April. The market saw the ECB as slightly hawkish.

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Czech Watch: Inflation takes another modest dip

Martin KRON MARCH 05, 2025 16:29 CET

According to a preliminary estimate by the Czech Statistical Office, inflation rose by 0.2% month-on-month in February and fell to 2.7% year-on-year from 2.8% in January. This development was in line with the market's median estimate.

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Croatia Watch: Real GDP growth of 3.8% in 2024

Zrinka ZIVKOVIC-MATIJEVIC FEBRUARY 27, 2025 12:51 CET

In 2024, Croatia was among the fastest-growing economies in Europe for the fourth consecutive year. Although the annual growth rate slightly slowed in the last quarter, the entire year recorded a high growth of 3.8% yoy, the strongest among euro area member states. Economic activity was strongly supported by domestic demand throughout the year - personal consumption and investments (construction). On the other hand, foreign demand was relatively subdued for most of the year which, along with solid imports of goods and services, had a negative net effect on GDP growth.

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Ukraine Watch: Monthly update - economy in war (February 2025)

Oleksandr PECHERYTSYN FEBRUARY 20, 2025 12:59 CET

Business expectations deteriorated seasonally, while consumer sentiment recorded a rather unexpected improvement in January 2025. Inflation continued to accelerate, but not as rapidly as in previous months. The NBU responded to the accelerated inflation by raising its key policy rate by 100bp, and we expect another such move in early March.
The beginning of 2025 brought a significant improvement in the central budget performance amid a clear understanding of the volume of external financing. The hryvnia strengthened seasonally in late January and early February, which was accompanied by a visible reduction in the NBU's FX interventions. Despite a significant widening of the trade deficit at the end of 2024, it narrowed by 6% over the year as a whole.

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Serbia Watch: CPI spike to 4.6% yoy in January

Ljiljana GRUBIC FEBRUARY 19, 2025 14:27 CET

After a mild growth in December'24, the accelerated inflation dynamics in January (+0.6% mom), resulted in an annual inflation surge outside of the inflation target with the indicator reaching 4.6% yoy.

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Ukraine Watch: Inflation acceleration returned to forecasted path

Oleksandr PECHERYTSYN FEBRUARY 11, 2025 14:10 CET

Inflation in January aligned with forecasts at 1.2% monthly. Annual inflation rose from 12.0% to 12.9% due to a low comparison base. We expect annual CPI to peak at around 15% in April before declining to 8.0% by year-end. This suggests further monetary tightening by the NBU.

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