Hungary: Economic sentiment drops to five-month low in April
April 21, 2013
The GKI-Erste economic sentiment index dropped to minus 21.7 points in April. The figure was below the minus 18.5 percentage points seen in March and marks the lowest level recorded since November 2012. According to GKI-Erste, the drop reflected a worsening of both consumer and business confidence.
Consumer sentiment fell from minus 37.3 points in March to minus 38.9 points in April, after having increased for five consecutive months. The reading marks the lowest level since September 2012, as consumers' assessment of their future financial situation worsened over the previous month, although their ability to save improved somewhat. 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 also worsened in April, falling to minus 15.6 points from minus 11.9 points in March. The deterioration was broad-based, as three out of the four sectors surveyed deteriorated compared to the previous month, the construction sector representing the only exception. The industrial sector recorded the sharpest deterioration. Accordingly, employment prospects deteriorated strongly compared to the previous month, with half of the companies surveyed planning layoffs in the coming months. 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%.