Hungary: Economic sentiment moderates slightly in March from all-time high observed in February
The GKI economic sentiment index, a composite indicator, dipped from the all-time high of 9.5 points recorded in February to 8.6 points in March, reflecting weaker business confidence. Nevertheless, March’s print marked the second-highest reading in the survey’s history.
The business sentiment component of the index declined from 15.5 points in February to 13.6 points in March, reflecting a deterioration in all sectors. Confidence in the industrial and trade sectors declined in March from historic highs recorded in February, while sentiment in construction and services dropped at a more moderate pace.
Looking at the different subcomponents of the business sentiment survey, intentions to increase staffing declined in all sectors but trade. Intentions to raise prices declined in industry and construction but increased in trade and services. Lastly, Hungary’s economic outlook was perceived more favorably in the trade and services sectors, remained unchanged in industry, and was viewed more negatively in construction.
Consumer confidence improved substantially in March, with the index increasing from minus 7.6 points in February to minus 5.8 points—the highest reading since November 2002. The improvement was largely driven by households’ more positive assessment of their current financial situations, employment outlook and savings capacity. Similarly, households’ view on future savings capacity and their willingness to purchase high-value durables rose markedly.