Car registrations increase in CEE but decline in the EU

On the radar

• Hungarian central bank kept policy rate unchanged at 6.50%.

• Production prices in industry were published at 1.3% y/y in Slovakia for April.

• AT 10.30 AM CET Slovenia will release retail sales growth in April.

• At 11 AM CET Croatia will publish 1Q25 GDP data including the structure of the growth.

Economic developments

Car registrations between January and April increased by an average of 2.1% in the CEE7 region (excluding Serbia). However, developments varied across CEE countries. Romania and Slovakia experienced declines in car registrations during this period, with year-on-year drops of 6.1% and 7.7%, respectively. In contrast, other CEE countries saw growth in car registrations. In Czechia, registrations rose by 4.9% year-on-year. However, Czech car production slowed by 7.6% year-on-year in the first four months of the year, as demand declined in Europe—impacting the country’s key export industry. Across the entire EU, car registrations fell by 1.2% year-on-year. Looking at car registrations by power source up to April 2025, hybrid electric vehicles accounted for 41% of registrations in the region, followed by petrol-powered cars at 35.9%. Battery electric and plug-in hybrid vehicles had a relatively low share, making up only around 5% of registrations. In contrast, battery-electric vehicles represented 15.3% of the total market share in the EU.

Market developments

The Hungarian central bank kept its policy rate unchanged at 6.50% today, and its communication did not introduce any new developments. The key terms “cautiousness” and “patience” remained central to the bank’s messaging, reflecting ongoing risks to the inflation outlook. No changes to the policy rate are expected in the near term. However, we maintain our view that anticipated monetary easing by major and regional central banks could allow for one or two cautious rate cuts in Hungary toward the end of the year. The EUR/HUF exchange rate has remained stable this week, and FX market volatility has been limited in other countries as well. Long-term yields have declined. In Poland, the latest polls slightly favor Trzaskowski (the candidate of the current government) over Nawrocki, suggesting a tight outcome in this Sunday’s presidential election.

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