Hungary: Economic sentiment strengthens further in November
November 26, 2018
The GKI economic sentiment index, a composite indicator, rose to 7.5 points in November from 7.2 points in October. The increase, as in the previous month, reflected an improvement in business confidence only partly offset by lower consumer confidence.
The business sentiment component of the index increased to 14.4 points in November from 13.1 points in October on the back of improved optimism in the industry, construction and services sectors. Confidence in the trade sector, on the other hand, declined, due to a deterioration in the assessment of the sales position. The increase in confidence in the industrial sector, moreover, was only marginal, positively affected by improved assessments of production levels and incoming orders. Lastly, sentiment in the services sector gained some ground on better assessments of the state of general business, while confidence in the construction sector rose to a new historic peak, thanks to better assessments of the state of business and an improved sales outlook.
Looking at the different subcomponents of the business sentiment survey, intentions to hire strengthened in all sectors, as did intentions to raise prices. On the other hand, views on Hungary’s economic outlook deteriorated in all industries expect in services, and they also worsened among consumers.
Meanwhile, consumer confidence declined again in November, with the index dropping to minus 12.1 points from minus 9.5 points in October. The decline reflected households’ worse assessments of their financial position, saving capacities and their possibility of purchasing high-value durables.
Hungary Fixed Investment Forecast
FocusEconomics panelists expect fixed investment to expand 5.2% in 2019, which is down 0.3 percentage points from last month’s projection. For 2020, the panel sees fixed investment growing 4.1%. FocusEconomics project expect private consumption to expand 3.7% in 2019, which is unchanged from last month’s projection. For 2020, panelists see private consumption growing 3.2%.