Hungary: Economic sentiment drops again in September
The GKI economic sentiment index, a composite indicator, dropped to a ten-month low of 5.5 points in September from 6.7 points in August and further below the record-high 10.5 points in July. The dip reflected a deterioration in business confidence only partly offset by improved consumer confidence.
The business sentiment component of the index declined to 10.4 points in September from 13.3 points in August on the back of reduced optimism in the industry and construction sectors. Industrial confidence was negatively affected by worse assessments of production levels, prospects and incoming orders. Meanwhile, sentiment in the trade sector improved notably on better assessments of sales and incoming orders, while confidence in the services sector remained broadly unchanged.
Looking at the different subcomponents of the business sentiment survey, intentions to hire weakened in all sectors except in trade, where they strengthened. Intentions to raise prices became more moderated in the industrial, construction and services sectors but strengthened in trade from the previous month. Lastly, views on Hungary’s economic outlook deteriorated notably in the industry and construction sectors, while they improved slightly in the trade and services sectors.
Meanwhile, consumer confidence improved in September, with the index rising to minus 8.3 points from minus 12.2 points in August. The increase reflected households’ more optimistic views over their capacity to save in the future—which hit a 16-year high—and over their possibility of purchasing high-value durables.