Hungary: Economic sentiment hits 26-month high in August
August 27, 2013
The GKI-Erste economic sentiment index rose to minus 14.3 points in August (July: minus 15.5 points), marking the highest level since June 2011. The improvement was mainly a result of improved business expectations, whereas consumer sentiment deteriorated.
Consumer sentiment dropped from minus 35.3 points in July to minus 36.9 points in August. Respondents were more pessimistic regarding their ability to save money as well as their economic conditions in the next 12 months. 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 increased to minus 6.3 points (July: minus 8.6 points). The improvement was mainly due to the construction and service sectors. In the industrial sector, businesses' were less pessimistic in their assessments of production in the previous period and in the stock of export orders. Expectations for industry, however, remained below the level recorded in June. Meanwhile, prospects for employment strengthened in the industrial and construction sectors, while remaining unchanged or deteriorating slightly in all the other sectors.
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%.