Hungary: Economic sentiment hits record high in July on stronger business confidence
The GKI economic sentiment index, a composite indicator, increased to a record-high 10.5 points in July from 9.8 points in June, reflecting an improvement in business confidence which more than offset a deterioration in consumer confidence.
The business sentiment component of the index rose to 17.3 points in July from 15.3 in June, amid increased optimism in the services, industry and construction sectors. The construction and industry indices hit new historic highs in July. Meanwhile, sentiment among trade firms declined somewhat.
Looking at the different subcomponents of the business sentiment survey, intentions to hire grew in the industry, trade and construction sectors, whereas they fell in services. Intentions to raise prices strengthened in the industry, services and trade sectors, while they moderated in the construction sector. Finally, perspectives on Hungary’s economic outlook were mixed, with confidence dropping in trade, construction and services, but improving in the industry sector.
Consumer confidence, meanwhile, declined in July, with the index dropping to minus 9.0 from minus 5.7 in June. The drop came as households were less optimistic about their current financial situations and were also less confident in their ability to save in the future. Furthermore, consumers’ assessment of the economy’s outlook deteriorated.