Hungary: Economic sentiment in March falls again

The GKI-Erste economic sentiment deteriorated notably in March, dropping from minus 1.8 points in February to minus 2.8 points, thus hitting an eight-month low. The result was mainly driven by a deterioration in consumer sentiment, while business confidence stabilized.

Business sentiment tallied 4.6 points in March, which met February’s reading. According to GKI, in March, sentiment in industry and the construction sector improved over the previous month. However, this was offset by a deterioration in sentiment in trade, in particular the service companies.

Meanwhile, consumer confidence fell from February’s minus 20.2 points to minus 23.8 points in March, which marked a six-month low. According to GKI, the deterioration came on the back of households’ more pessimistic views regarding their financial situation for the following year. However, their assessment of their saving capability improved over February.

FocusEconomics panelists expect total consumption to expand 2.5% in 2016, which is unchanged from last month’s projection. For 2017, the panel expects total consumption to grow 2.3%.Panelists expect fixed investment to decrease 0.2% in 2016, which is unchanged over last month’s estimate. In 2017, the panel sees investment expanding 3.1%.