Hungary: Business confidence rises to highest level in nearly a decade
February 21, 2011
In February, the economic sentiment index produced by the Hungarian Economic Research Institute (GKI, Magyar Gazdasagkutato Intezet) stepped up 1.2 points to minus 5.1 points, reaching its highest level since April 2006. The improvement was entirely driven by stronger businesses confidence, as external demand recovers amid strengthening growth in Western Europe. In contrast, consumer sentiment decreased for the fourth month in a row in February. Business sentiment rose from plus 0.5 points in January to plus 2.9 points, which represented the highest reading in almost a decade. According to GKI, expectations were higher in all sectors compared to January, with the exception of wholesale and retail trade. In the industrial sector, the rise was fuelled by a rise in production expectations and stock of orders, in particular for exports. Meanwhile, consumer confidence dropped to minus 27.7 points, mostly reflecting increasing pessimism regarding prospects for the Hungarian economy and respondents' current financial situation. Nevertheless, GKI pointed out that fears of unemployment decreased in February.