The batch of September inflation data this week offered some welcome signs for policymakers, but the Hungarian central bank seems concerned about recent currency weakness which means that the easing cycle there may be paused again later this month. Elsewhere, the Polish government outlined plans to comply with the EU’s fiscal rules. However, most of its efforts to reduce the budget deficit aren’t planned until 2026 onwards, and we think that the government may continue to kick the can down the road on fiscal tightening over the coming years. While the outlook for the public finances in Poland does not concern us as much as it does in Hungary or Romania, we think the debt ratio will grind higher in the coming years.
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