Hungary: Economic sentiment drops in March
March 23, 2011
In March, the economic sentiment index produced by the Hungarian Economic Research Institute (GKI, Magyar Gazdasagkutato Intezet) dropped markedly to minus 10.7 points, well below the minus 5.1 points tallied in February. The deterioration reflected a weaker assessment of future conditions by both consumers and businesses. In particular, consumer confidence dropped almost ten full points to minus 37.3 points, which represented the lowest level in over a year. GKI stated that the decline was fuelled by weaker prospects about households' own financial situation over the next year as well as a more downbeat assessment of their expected savings capacity. Meanwhile, business sentiment declined for the first time since September 2010, falling from plus 2.9 points to minus 1.3 points. According to GKI, the decline was broad-based, but mostly led by the construction as well as wholesale and retail trade sectors. Confidence in the industrial sector dropped only modestly, supported by strong demand abroad.