Hungary: Economic sentiment deteriorates in July
July 28, 2013
The GKI-Erste economic sentiment index fell to minus 15.5 points in July (June: minus 14.8 points), marking a halt to the improvement seen in the past two months. The decline was driven by deterioration in business expectations.
Consumer sentiment rose from minus 37.3 in June to minus 35.3 in July. According to the GKI-Erste index, consumers were less pessimistic about job prospects and the country's economic outlook. FocusEconomics panellists expect total consumption to contract 0.6% this year, which is up 0.2 percentage points from last month's projection. For next year, the panel sees total consumption rebounding to a 0.8% expansion.
Business sentiment deteriorated in July, dropping to minus 8.6 points (June: minus 6.9 points). The worsening was due to the industrial and service sector, while expectations for trading and construction companies improved. The decline in confidence in the industrial sector reflected a worsened assessment for stock of new orders in the next period. Confidence in the service sector fell amid a more negative evaluation of the general business climate and sales. Prospects for employment weakened in the industrial and construction sectors but improved in others.
Panellists expect fixed investment to fall 2.3% this year, which is up 0.1 percentage points over last month's estimate. For next year, the panel sees investment expanding 0.5%.