CEEMEA Inflation Monitor Mixed Developments in Headline Inflation with Smaller Downside Surprises as Core Holds Steady

Economics Research 19 August 2026 | 9:28PM BST

Mixed Developments in Headline Inflation with Smaller Downside Surprises as Core Holds Steady

Mixed Developments and Moderating Downside Surprises Kevin Daly | Headline inflation registered mixed developments across the region. Inflation prints Goldman Sachs International

continued to mostly come in below consensus, but the surprises were fewer and Clemens Grafe | smaller in magnitude compared to previous months. Moderate upside surprises were Goldman Sachs International recorded in Ukraine and Romania, while inflation releases in Czechia, Poland, and Israel were in line with consensus expectations. Andrew Matheny | Goldman Sachs International In the CEE, inflation declined materially in Romania (from +10.4%yoy to +8.2%yoy) and continued to decrease in Hungary (from +1.7%yoy to +1.2%yoy). Inflation Farouk Soussa | increased in Poland (from +2.5%yoy to +3.0%yoy), Ukraine (from +7.2%yoy to Goldman Sachs International +7.7%yoy), and Czechia (from +1.5%yoy to +1.7%yoy), while it remained stable in Ludovica Ambrosino Russia (at +6.0%yoy). | Goldman Sachs International In Sub-Saharan Africa, headline inflation edged up in Kenya (from +6.4%yoy to Basak Edizgil +6.5%yoy) but fell in both Ghana (from +5.3%yoy to +4.6%yoy) and South Africa | (from +5.0%yoy to +4.3%yoy). Finally, inflation declined in Turkiye (from +32.1%yoy Goldman Sachs International

to +31.8%yoy) and increased in Egypt (from +14.3%yoy to +14.9%yoy). Johan Allen | Goldman Sachs International Core Inflation Broadly Unchanged Underlying inflation – as measured by our GS TRIM, which removes outlier categories from the CPI basket – was broadly unchanged for the most part in July. In the CEE-4, trimmed inflation increased by 0.2pp to +2.5%yoy in Hungary, and edged up by 0.1pp to +2.8%yoy in Czechia, but remained stable in both Poland (at +3.8%yoy) and Romania (at +8.7%yoy). GS TRIM was also unchanged in Russia (at +5.7%yoy), Ukraine (at +6.9%yoy), and Turkiye (at +29.2%yoy), while it weakened in Israel (by 0.2pp to +2.1%yoy), South Africa (by 0.3pp to +3.3%yoy), and Ghana (by 0.3pp to +4.8%yoy). Finally, it increased by 0.3pp in Egypt (to +14.7%yoy) and edged up by 0.1pp in Kenya (to +2.3%yoy).

Reviving Inflation Risks in the EM Space The renewed escalation in the Iran conflict and the increasing tensions in the Black Sea following the shelling of maritime vessels by Ukraine and Russia have revived upside risks to EM inflation outlook. In a recent EM Macro Navigator, we discuss the risks from re-emerging pressures in global oil markets. While EM inflation has remained relatively subdued since the onset of the Iran conflict – supported by domestic fuel subsidies, low food inflation, and lagged effects of prior currency strength – a sustained re-escalation of the conflicts poses significant upside risks.

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Goldman Sachs CEEMEA Inflation Monitor

First, as the fiscal accounts of countries deploying large subsidies to cap fuel prices have been deteriorating, some EMs are beginning to look at ways to scale back fiscal support, with consequences for inflation. Second, while EM food inflation has been benign, momentum in global food prices has accelerated, driven by a sharp rise in wheat prices owing to a surge in attacks on commercial shipping in the Black Sea, lagged effects of higher fuel prices on production and transportation costs, and rising fertilizer prices. Third, the attacks on Russia’s refineries keep refining margins under pressure, adding to the impact of higher crude prices. Fourth, LNG prices are under pressure as the Strait of Hormuz remains closed and the refilling of storage tanks in Europe is running behind the schedule of previous years. Finally, EM currencies have generally weakened, with many sitting at their lows since the start of the war, thus increasing the likelihood of pass-through to domestic inflation.

Exhibit 1: CEEMEA: Realised Inflation and GS Forecasts vs. Inflation Objectives and Consensus Headline inflation…