Armenia has faced challenging geopolitical circumstances, with an influx of war refugees from Nagorno-Karabakh, Russia, and Ukraine.This has led to the immigration of approximately 100,000 refugees, placing additional pressure on this small economy.

Through it all, Galystan has kept a cool head. In a sign of confidence in longer-term price stability, the CBA lowered its inflation target to 3% (with a variation band of ±1.0 percentage points) from 4% in late 2024. The IMF June 2025 review of Armenia judged the current monetary policy stance as “appropriate.” Annual inflation rates of around 3.2% in 2025 and a projected 3.3% in 2026 appear to be within the CBA’s 3%-4% target. Policy rates have been cut by a cumulative 225 bps since 2024 to 6.75%,

Fitch Ratings, which in July affirmed Armenia at a BB-Stable outlook, says inflation “should stay within target through to 2027, although the loose fiscal policy and projected moderate dram depreciation pose some risks, making further interest rate increases unlikely. Fitch assesses the scope for further cuts as limited this year. Dollarization has been declining since its peak in 2014, when dollars accounted for 72% of deposits and 66% of loans, and now stands at 47.6% and 32%, respectively.

BELARUS | Roman Golovchenko: Too Early To Say

The replacement of Pavel Kallaur at the head of the National Bank in January by former Prime Minister Roman Golovchenko led most Belarus watchers to conclude that the most likely outcome would be regressive. According to the Carnegie Institute, despite reintroducing central planning practices including price controls on some products, Kallaur was professional and “successfully modernized the Belarusian central bank, introducing inflation targeting, a free-floating currency, and regular contact with independent experts.”

No economic expert, Golovchenko is a loyalist to Belarus’ dictator, Aleksander Lukashenko, and as premier, echoed his calls for subsidized credit lines to be given to loss-making state enterprises.

He arrives at the National Bank at a time of change for Belarus, which continues to move closer to Russia. GDP grew by some 4% last year—if official figures can be believed—but the engines driving this growth, consumer spending and demand from Russia’s military for industrial products, are slowing. Meanwhile, inflation and inflationary expectations have been rising.

The new regime at the Bank hasn’t inspired confidence so far, with the governor stating that the current refinancing rate of 9.75%—raised by 25 bps in June—is appropriate, given the current inflation rate of 7.4%, despite the inflation target being 5% and on an upward trend.

BOSNIA & HERZEGOVINA | Jasmina Selimović: B

Born in 1979, Jasmina Selimović, who has a strong background in economics, became Bosnia’s first female Central Bank (CBBH) governor last year. Her main role has been to provide reassurance in a country that over the past year has become more unsettled, with observers worried that one of its constituent parts, Republika Srpska, is undermining the constitutional structure put in place 30 years ago at Dayton, Ohio, which brought the country’s civil war to an end.

BH has operated a currency board for 25 years, and its currency, the Convertible Mark, is tied to the euro at a rate of one BAM to 51c, making it a fully convertible currency.

BH’s challenges, aside from concerns over a return of ethnic tensions, include the poor transparency of the business environment. According to Transparency International’s Corruption Perceptions Index, BH’s position worsened in 2024 when it dropped six spots to 114th place out of 180 countries. The CBBH’s website says, “At the CB, we apply EU corruption prevention standards. We monitor business compliance to prevent conflicts of interest, corrupt actions and other risks that may result in financial losses or undermine our reputation.”

BULGARIA | Dimitar Radev: B+

In July 2025, Dimitar Radev celebrated 10 years as governor of the Bulgarian National Bank, a significant milestone in a country hardly known for stability—the last three years have seen seven parliamentary elections, the last in October 2024, which in January 2025 yielded a broadly stable coalition government committed to reform. Radev’s longevity in post and his outspoken commitment to sound money were surely factors in Bulgaria being given the green light for euro accession in January 2026. From August 2205, all prices will be shown in each currency to help Bulgarians become accustomed to the new currency.

Although Bulgaria has a problem with persistent inflation—it hit 4% in January 2025 following the removal of some price controls—it dropped back to 2.7% in April, with interest rates at 3.9%, low enough for the ECB to invite Bulgaria into the eurozone. Bulgaria has very low levels of debt—just 24%, well below the eurozone’s official 60% limit and is unusual in that it pegged the lev to the euro right from the beginning of monetary union in 1999, even before it joined the EU in 2007.

Dangers will remain following accession. Bulgaria’s currency board, in place since 1997, meant the BNB’s only real monetary levers were maintaining bank reserve requirements at 12%, with zero interest paid. Reserve requirements will drop to 1% following euro adoption.

CZECH REPUBLIC | Aleš Michl: A-

The Czech National Bank’s (CNB) monetary policy seems to be, as always, “steady as she goes,” after delivering two rate cuts in February and May 2025, coming after gradual monetary easing during 2024. Fitch Ratings, whose sovereign rating is AA-, anticipates that the CNB will maintain the policy rate at 3.5% through 2025.

The CNB was alarmed about inflationary pressures over the summer, when CPI data reinforced those concerns, with the headline rate in July and August at 2.7%, against the 2% (+/- 1%) target. This makes uncomfortable reading for Governor Aleš Michl, whose CNB has a target of price stability, but in September CNB maintained a 3.5% interest rate.

The CNB projects average inflation in 2025 of 2.5% falling to 2.2% in 2026. Price pressures are emanating from the services sector, fueled by a strong domestic economy, including a robust property sector and wage-driven service sector inflation, as well as rising food and energy prices.

Real GDP grew by 2.6% year-over-year in the second quarter of 2025, and the CNB raised its full-year projections for 2025 and 2026 to 2.6% for each year. This is broadly in line with independent forecasts suggesting that the CNB has presided over a well-balanced economy, characterized by stable, non-inflationary growth.

GEORGIA | Natia Turnava: C

In February 2025, Natia Turnava—previously a part of the ruling Georgian Dream government—was confirmed as governor of the NBG by Georgia’s Prime Minister. The move suggests a desire for continuity amid continued doubts about Tbilisi’s commitment to reform and Western integration, which is believed to be behind the 30% decline in FDI in 2024 to $1.33 billion.

Fitch Ratings forecasts that it will average 3.8% of GDP over 2025 and 2026, insufficient to cover the current account deficit of 4.5%.

Turnava has successfully prioritized price stability. Inflation in 2024 dipped below the 3% target, despite strong domestic demand. Fitch Ratings expects it to average 3.2% over 2025. Interest rates are expected to remain stable at 8%, with no reduction likely, as this may boost demand for foreign currency and reduce the high level of dollarization, which is a priority.

Meanwhile, the NBG has been seeking to boost foreign reserves: at the end of June 2025, these were approximately $4.7 billion, a 5.4% increase from the end of 2024, following months of dollar sales to support the lari. Turnava has sought to diversify the NBG’s asset base, including making large purchases of gold.

HUNGARY | Mihály Varga: Too Early To Say

Mihály Varga started his six-year term as governor of the National Bank of Hungary (NBH) in March 2025, saying, “The economy is on a sound footing, growth prospects are favorable, and the liquidity of families, businesses and the banking sector is strong.”

However, the country has been something of an outlier in CEE, with persistent inflation a problem: YoY inflation is currently around 4.6%. Meanwhile, growth remains sluggish: 0.8-1% is expected this year after just 0.5% over 2024 (well below the NBH projections in March of GDP growth of 1.9-2.9% for 2025), although this is projected to rise to 2.5%-3% in 2026.

Varga appears to have acknowledged Hungary’s persistent structural inflation problem, which explains the decision to maintain interest rates at 6.5% as of August, for the eleventh consecutive month, with the NBH signaling that it will remain at this rate. This is despite the failure of growth to rise to its expected levels.

Nonetheless, with the economy facing strong headwinds from US tariffs and a summer drought, which will likely feed into food prices, he has little room for maneuver.

ING maintains inflation will rise to around 5% in the fourth quarter, averaging 4.6% across 2025. ING states that without government price interventions, the 2025 average inflation rate would exceed 5.5%. Its persistence, alongside high inflationary expectations, has led it to forecast average inflation expectations for 2026 and 2027 at 3.9%.

POLAND | Adam Glapiński: B

Narodowy Bank Polski (NBP) Governor Adam Glapiński has had a quieter 2025 than 2024, when he faced removal by Prime Minister Donald Tusk. Although the threat to Glapiński has receded, other criticisms have continued, notably in the wake of the Polish Monetary Council’s decision to lower interest rates by 25 bps, to 4.75% on July 3, a month after an earlier reduction of 25 bps was highlighted as “not a highway” to lower interest rates.

ING Bank suggests interest rate cuts are to be frontloaded with a target rate of 3.5% to be reached by early Spring 2026.

Headline inflation is falling towards the NBP target of 1.5% to 3.5% and is expected at around 2.5% by year’s end. Meanwhile, growth has been driven by a strong services sector; in the second quarter of 2025, GDP growth YoY was 3.4%. A close to 4% growth rate is expected for the second half, which would enable full-year GDP growth to reach 3.5%, according to ING Bank projections. Even faster growth is expected for 2026 and 2027, making Poland CEE’s growth leader.

Glapiński has stated that, although inflation is on a downward path, risks remain, including the absence of fiscal tightening despite the deficit rising to 6.6% of GDP in 2024 (compared to 5.3% in 2023), which is 0.7% above the government’s autumn statement projections.

ROMANIA | Mugur Isărescu: B-

The world’s longest-serving central bank governor, in office since 1990 except for a brief spell as prime minister, 76-year-old Mugur Isărescu has had a challenging year, marked by rising inflation and sluggish growth. Romania’s economic structure is such that it has always had a problem with sticky inflation—fueled by wage increases and strong consumer thirst for imported goods—but over the past year it has been additionally stoked by fiscal stimulus, with the budget deficit ending 2024 at 9.3%, and inflation well above target at 5.8%.

Amidst this and an unsettled political picture, finally resolved with the victory of centrist Nicusor Dan in the second round of the presidential elections in May, Isărescu’s response has been to sit tight. Interest rates in mid-2025 stood at 6.5%, unchanged since August 2024, and unlikely to be reduced until there is asignificant appreciable decline in inflation.

However, by mid-year, inflation had risen around 6% and was likely to be pushed higher by, ironically, the government’s ambitious fiscal reduction package, aimed at pulling the budget deficit down to around 7%. The target for 2026 was set at 6.4%, but this included inflationary elements, such as rises in excise duties. ING was forecasting a 2025 year-end inflation of 7.5%, “likely eliminating any room for monetary easing by the NBR.”

RUSSIA | Elvira Nabiullina: N/A

Once regarded as one of the world’s most competent central bank governors, Elvira Nabiullina’s star faded as observers have seen her as one of the main enablers of President Vladimir Putin’s war economy. She follows policies characterized by caution and stability. However, the decline in Russia’s economic prospects has also diminished her reputation.

Although she can claim some success in the fight against inflation, which was 8.8% in July, with a target of 4% for 2026, this has been at the cost of high real interest rates—some 17% when Global Finance went to press, down from 21% in late 2024—reinforcing the stagnation.

As Russia refocuses its economy toward civilian priorities, it seems unclear what Nabiullina can do. Further rate cuts in 2026 could lead to ruble depreciation, potentially boosting inflation again. Meanwhile, growing concerns about the bank sector, fueled by a massive surge in corporate loans over the past two years, will continue to rumble: according to Eurasia Group, “corporate bank lending surged by 45%—$450 billion or 20% of GDP—since the war began, most to public/quasi-public entities linked to the war effort.” It says that a small-scale crisis would be manageable through capital injections, but a large one “could still trigger a severe recession if not contained, causing a credit crunch.”

SERBIA | Jorgovanka Tabaković: A-

As a member of the ruling Serbian Progressive Party, it came as no surprise to Serbia watchers that Jorgovanka Tabaković, 65, started her third term as governor of the National Bank of Serbia (NBS), which runs from 2024 to 2030. The main reason for her latest term is the undeniable success she has made of her first two.

Caution—a valuable resource in a country where political tensions run high—appears to be her byword. It can be seen in her uncompromising attitude towards inflation, which at 3.8% in mid-2025 was on track to reach the target of 3% by year’s end, held down by high real interest rates (5.75% with deposit and credit facility rates at 4.5% and 7%, respectively). The successful managed narrow float of the dinar against the euro (1,000 RSD = €8.54) has helped keep prices down and minimize exchange risk.

To guard against an increasingly unpredictable global environment, NBS has increased its gold reserve. Altogether, it holds 50.5 tonnes of gold, equivalent to almost 17% of its €28 billion foreign reserves. As gold prices continue to increase, a 30% increase as of September over 2025

Additionally, Serbia has enacted new banking regulations that establish a banking resolution fund, upgrade the prudential and regulatory framework, and expand the central bank’s supervisory powers and responsibilities.

TURKEY | Fatih Karahan: B

Given that he was Turkey’s sixth central bank governor in five years when Fatih Karahan was appointed in February 2024, initial opinions about Karahan’s potential longevity were mixed. However, the 43-year-old economist is taking every opportunity to stress his commitment to stability and to bringing Turkey’s inflation under control, as well as reducing dollarization in the economy.

His strategy to increase the share of Turkish lira deposits, gradually reduce FX-protected deposits, and regulate credit growth to prevent fluctuations in credit demand has had some success. Inflation ended 2024 at 44.4% against an annual average of 60% and has fallen steadily over the past few months, reaching 35.2% at the start of June, less than half the 75% figure reached a year earlier. However, the drop to just under 33% in August suggests the Central Bank of the Republic of Türkiye (CBRT) may have a challenge in meeting its end-of-year target of 24%.

Karahan told investors, “We will do whatever it takes to reach this target.”

Interest rates were on a steady downward track until March 2025, reaching 42.5% until they were hiked by 350 bps in response to the international panic caused by President Recep Tayyip Erdoğan’s arrest of CHP opposition leader Ekrem İmamoğlu, but have since been reduced to 40.5%. The hike showed how easily events beyond its remit and control can throw the CBRT off balance, as Fitch Ratings warned in its April Emerging Markets Review.

UKRAINE | Andriy Pyshnyy: N/A

Decision-making at the National Bank of Ukraine has been dominated by the war with Russia, which has worsened over the past year, with severe damage to infrastructure and industry. Ukraine’s economy is currently around 20% smaller than it was in February 2022. At the annual Ukraine Recovery Conference in Rome, Andriy Pyshnyy appealed to investors and institutions not to hold back from investing, admitting that rebuilding Ukraine could cost about $1 trillion.

In another major address on July 24, in which he stated that the key interest rate would be held steady at 15.5%, Governor Pyshnyy said GDP growth this year would slow to 2.1% from 2.9% in 2024, a larger drop than initially forecast, with a worse-than-expected harvest partly to blame. He admitted that the “pace of recovery depended on the course of the war” and said the shortfall in aid—Ukraine has so far received about $24 billion of the $54 billion expected—was likely to impact growth and confidence.

He expects inflation to reach 9.7% at the end of 2025, then slow to 6.6% in 2026, against a target of 5%.

The post Central Banker Report Cards 2025: Central and Eastern Europe appeared first on Global Finance Magazine.