Hungary: Economic sentiment deteriorates in February on falling consumer confidence
February 25, 2014
In February, the GKI-Erste economic sentiment index fell from the minus 1.7 points recorded in January to minus 2.1 points. According to the GKI economic research institute, the deterioration came on the back of falling consumer confidence, while business sentiment recorded an improvement over the previous month and reached the highest level since November 2000.
Consumer sentiment fell from minus 17.2 points in January to minus 22.0 points in February. According to GKI, "households assessed their future financial situation and saving capacity worse than in January." FocusEconomics panelists expect total consumption to expand 1.3% in 2014, which is unchanged from last month's projection. For 2015, the panel expects total consumption to increase to a 1.6% expansion.
Business sentiment, however, rose from 3.8 points in January to 4.9 points in February. According to GKI, the figure resulted from an improvement in expectations for the industrial sector. On the other hand, the construction and trade confidence indices fell sharply for the first time in February after having increased for seven consecutive months. Panelists expect fixed investment to increase 2.4% in 2014, which is unchanged over last month's estimate. For 2015, the panel sees investment expanding 2.8%.
Author: Dirina Mançellari, Senior Economist