Hungary: Economic sentiment reaches highest level since April 2011
October 24, 2013
In October, the GKI-Erste economic sentiment index rose to minus 9.3 points, marking the highest level since April 2011. The reading was an improvement over the minus 11.6 points recorded in September. According to the GKI economic research institute, the increase was driven by an improvement in both business expectations and consumer sentiment.
Consumer sentiment rose from minus 31.0 points in September to minus 29.4 points in October. A considerable improvement was recorded in households' views of their financial situation in the next year. However, consumers' sentiment regarding their ability to save deteriorated. FocusEconomics panelists 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, which is up 0.3 percentage points from last month's estimate.
Business sentiment rose from minus 4.8 points in September to minus 2.3 points in October. The improvement was broad based, with all of the areas of the index showing an increase. Panelists 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%, which is unchanged from last month's forecast.
Author: Dirina Mançellari, Senior Economist