Valentin Tataru

Image Source: Pexels From Paris to Tokyo, budget battles are back in the driving seat in global bond markets.

Despite recent fears, we think the National Bank of Hungary will delay rate cuts and the forint can stay strong

CEE economies show contrasting trends: Poland is enjoying balanced growth and faster monetary easing as the inflation outlook improves. Czech performance remains solid but vulnerable to weak external demand. Hungary is struggling with stagnation and cautious policy, while Romania faces subdued growth and persistent inflation

Central banks across Central and Eastern Europe and emerging markets are aiming for currency stability amid inflation, fiscal risks, and geopolitical tensions. EU funds, carry trades, and resilient growth all support FX strength, while elections, rating downgrades, and war pose headwinds

Central and Eastern European countries have benefited greatly from EU funds, but next year’s deadline puts time pressure on the absorption of Recovery and Resilience Facility resources. We expect larger inflows of EU money next year, notably for Romania and Poland, to support growth and investment

Romania’s construction sector found some stability in 2025 after last year’s slump but faces cloudy prospects amid weak demand and fiscal shifts. EU-funded infrastructure remains the sector’s anchor, driving growth as companies adapt to a changing market landscape

Economic sentiment in Romania should gradually improve next year

We expect further gains for EMEA FX in 2026, but Hungary's forint looks the most vulnerable

As Romania continues to grapple with still-large but improving macro imbalances, an effective last-mile absorption of EU Recovery and Resilience Facility (RFF) funds in the months ahead will prove critical. The boost to investments as a result should at least partially mitigate the impact of slowing consumption

The EUR/HUF move can extend to 350 over the coming months as Hungary's relations with Brussels improve