Hungary: Economic sentiment dips to nine-month low in August
August 27, 2018
The GKI economic sentiment index, a composite indicator, dropped to a nine-month low of 6.7 points in August from a record-high 10.5 points in July. The dip reflected the deterioration in both business and consumer confidence.
The business sentiment component of the index declined to 13.3 points in August from 17.3 points in July on the back of reduced optimism in the industry and service sectors. Meanwhile, sentiment in the services and construction sectors improved slightly from the previous month, with the construction index hitting a new historic high in August.
Looking at the different subcomponents of the business sentiment survey, intentions to hire weakened in all sectors except in industry, where they continued to strengthen. Intentions to raise prices remained steady in the industrial, construction and services sectors and moderated in trade from the previous month. Lastly, views on Hungary’s economic outlook broadly improved across sectors, with the exception of services where they remained unchanged.
In a similar vein, consumer confidence fell in August, with the index sliding to minus 12.2 points from minus 9.0 points in July. The drop reflected households’ more pessimistic views over their financial situation, savings capacity in the future and general economic outlook.
Author: Javier Colato, Economist