Hungary: Economic sentiment continues to fall as business confidence dwindles
August 24, 2011
The global economic slowdown is taking its toll on the business sector. In August, the GKI-Erste economic sentiment index fell for the fourth consecutive month to minus 18.9 points, down from minus 16.0 points in July. The drop was entirely the result of weakening business confidence, which has fallen markedly after reaching a decade-high in February. Business confidence plunged from minus 6.9 points in July to minus 11.3 points in August, which represents the lowest level in 18 months. The drop was broad-based, with expectations falling in all sectors, but especially in commerce and services. Nonetheless, according to GKI, sentiment in the industrial sector declined for the sixth month in a row. In contrast, consumer confidence ticked up after declining for three consecutive months. In August, consumer sentiment stepped up to minus 40.7 points from minus 42.0 points in July. The improvement came as a result of respondents assessing ?their financial situation, the number of unemployed and the future prospects of the Hungarian economy a bit more favourably than a month ago.?