Retail Sales in Poland in February grew by 6.1%

On the radar

• Retail Sales in Poland in February grew by 6.1% y/y well above market expectations.

• PPI index declined by -3.5% y/y in February in Slovenia.

• Current account deficit in Slovakia narrowed to EUR 134 million in January.

• Average real wage in January will be published in Slovenia at 10.30 AM CET.

Economic developments

In the first two months of the year, the growth of new car registrations was particularly strong in Croatia (more than 25% y/y), Poland, and Slovakia. In Czechia, car registrations posted solid growth as well. On the other hand, new car registrations in Romania were on average lower in January and February 2024 compared to the respective period of the previous year. Overall, the growing number of new car registrations is a good sign for economic activity. Interestingly, more than half of the new cars registered fell into the electric vehicles category in Hungary and Poland. Another piece of good news from Thursday is that the flash Composite PMI Index in the Eurozone gained 0.7 points compared to the previous month, reaching a value of 49.9 points in March. It is mainly the service sector that supports the economic recovery. The fact that the industry remains a drag, particularly in Germany (flash Manufacturing PMI dropped to 41.6 in March), is a bit worrisome for the region. The weak performance of the industry in Germany, the main trading partner of the region, may become a source of negative impact on the industry in several CEE countries, namely in Czechia or Slovakia.

Market movements

In Hungary, the cap on bank deposits will end on April 1, as the Ministry of Finance stated that it is no longer needed once the key interest rate fell to 9.0% in February. On Wednesday, the European Commission warned Romania that it had fallen behind with the reforms it must make in exchange for EU recovery funds. Additionally, its fiscal deficit was concerning, putting billions of euros from EU funds at risk. On Thursday, Romania sold RON 1.297 billion of bonds maturing in 2030. The amount sold was higher than planned. Last but not least, Slovakia will cast the ballots during the weekend as the first round of presidential elections is scheduled.

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