Hungary: Economic sentiment declines further in February
The GKI economic sentiment index, a composite indicator, dropped to 6.7 points in February from 7.1 points in January. The decrease reflected a decline in business confidence which more than offset an improvement in consumer confidence.
The business sentiment component of the index fell to 12.9 points in February from 13.9 points in January on the back of softer optimism in the industrial, trade and services sectors. Confidence in the construction sector, on the other hand, rose. Weaker confidence in the industrial sector was caused by worse assessments of production levels and stocks of orders. Meanwhile, confidence in the services sector dropped due to a deterioration in the assessments of the general business climate and of turnover. Conversely, sentiment in the construction sector gained ground on better assessments of production and orders.
Looking at the different subcomponents of the business sentiment survey, intentions to hire weakened in all sectors except in the construction sector, while intentions to raise prices declined in all sectors except for construction. Lastly, views on Hungary’s economic outlook improved in all sectors except in industry, and they also got rosier among consumers.
Meanwhile, consumer confidence rose in February, with the index increasing to minus 11.1 points from minus 12.1 points in the preceding month. The increase reflected households’ more favorable views on their financial position and saving capacities, and they also showed greater willingness to purchase high-value durables.