Hungary Economic Sentiment October 2018


Hungary: Economic sentiment strengthens in October

October 29, 2018

The GKI economic sentiment index, a composite indicator, rose to 7.2 points in October from 5.5 points in September. The increase reflected an improvement in business confidence only partly offset by lower consumer confidence.

The business sentiment component of the index increased to 13.1 points in October from 10.4 points in September on the back of improved optimism in the industry, construction and services sectors. Industrial confidence was positively affected by worse assessments of production levels and incoming orders. Meanwhile, sentiment in the trade sector declined somewhat on worse assessments of sales and expected orders. Lastly, confidence in the services sector gained some ground on better assessments of the general business climate.

Looking at the different subcomponents of the business sentiment survey, intentions to hire strengthened in the industry and construction sectors, declined in the trade sector and remained unchanged in the services sector. Intentions to raise prices became more intense in the industrial, construction and services sectors but weakened in trade from the previous month. Lastly, views on Hungary’s economic outlook improved in the industry and construction sectors, while they deteriorated slightly in the trade and services sectors.

Meanwhile, consumer confidence declined in October, with the index dropping to minus 9.5 points from minus 8.3 points in September. The decrease reflected households’ worse assessments of their financial position more than offsetting their more optimistic views over their capacity to save in the future—which hit a 16-year high. Their assessment of their possibility of purchasing high-value durables, meanwhile, remained unchanged.

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%.

Author: Massimo Bassetti, Senior Economist

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Hungary Economic Sentiment Chart

Hungary Economic Sentiment October 2018

Note: Consumer confidence, business confidence and economic sentiment indicators.
Source: GKI Economic Research Co.

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