Hungary: Economic sentiment hits new record-high in June on stronger consumer and business confidence
June 25, 2018
The GKI economic sentiment index, a composite indicator, increased to a record-high 9.8 points in June from 8.3 points in May, reflecting an improvement in both business and consumer confidence.
The business sentiment component of the index improved in June, rising to 15.3 from 13.8 points in May, amid increased optimism in the services, trade and construction sectors. The construction index hit a new historic high in June. Meanwhile, sentiment in industry firms deteriorated.
Looking at the different subcomponents of the business sentiment survey, intentions to hire grew in the services, trade and construction sectors, whereas they fell in industry. Intentions to raise prices moderated somewhat in industry and services. The percentage of firms that intended to raise prices rose, however, in the construction and trade sectors. Finally, perspectives on Hungary’s economic outlook were mixed, with confidence notably dropping in industry, construction and services, but improving in the trade sector.
Consumer confidence also improved in June, with the index rising to minus 5.7 from minus 7.5 in May. The increase came as households were more optimistic about their current financial situations and were consequently more optimistic about the possibility of purchasing big-ticket items. Households were also more confident in their ability to save in the future. Furthermore, consumers were more upbeat about the labor market, as fear of unemployment had never been so low.