Central Europe Scorching Under Rising Temperatures
The Central and Eastern European (CEE) region is experiencing a rise in cooling demand due to increasing temperatures. The number of cooling degree days has increased by 25% over the past 25 years, indicating a structural shift towards air conditioning and cooling needs.
Poland saw a growth rate of 5.1% year-over-year (y/y) in July, while producer prices rose 2.8% y/y. Wages accelerated to 6.8% y/y, but employment contracted by -0.8% y/y.
Slovakia's unemployment rate stood at 5.28%, and Croatia will release data on its unemployment rate in July and real wage growth in June today.
The Czech koruna strengthened slightly against the euro this week, while the Polish zloty and Hungarian forint weakened. The Czech Finance Minister predicted a deficit of around CZK 310bn to 400bn (close to 3% of GDP) for 2027.