Hungary: Economic sentiment rebounds strongly in May
May 27, 2013
The GKI-Erste economic sentiment index rose to minus 16.7 points in May. The figure is above the minus 21.7 points seen in April and marks the highest level recorded since July 2011. That said, according to GKI-Erste, the jump was mainly due to seasonal effect adjustments.
Consumer sentiment rose from minus 38.9 points in April to minus 34.4 points in May, the highest level in more than two years. Consumers' assessment of their future financial situation as well as their ability to save improved over the previous month. FocusEconomics panellists 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.
Business sentiment also improved in May, rising to minus 10.5 points from minus 15.6 points in April. According to the GKI-Erste, the improvement was "spectacular", as three out of the four sectors surveyed rose over the previous month, with the service sector representing the only exception. The construction sector recorded the strongest gain. Accordingly, employment prospects improved greatly after having suffered a large drop in April, with less than half of all companies surveyed planning layoffs in the coming months. Panellists 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%.