GKI: Deteriorating confidence indices and economic outlook in Hungary

By: Trademagazin Date: 2024. 11. 26. 13:03

In November, both businesses and consumers became more pessimistic about Hungary’s economic outlook, according to a survey conducted by the GKI Economic Research Institute. The GKI business confidence index fell by more than 2 points compared to the previous month, and the outlook deteriorated in all four sectors surveyed.

The industrial and construction confidence indices fell by 3 and 2 points respectively, while trade and services recorded decreases within the margin of error. Trade remains the most pessimistic sector, closely followed by construction. The situation in services is somewhat more favorable, but the overall picture remains negative. The perception of the predictability of the business environment has fallen to a two-year low.

Inflation expectations and price increases

Companies’ aggregate price increase plans rose to their highest level in 11 months, with price increases particularly strong in the trade sector. This clearly indicates that businesses are trying to mitigate the effects of inflation, which means further price increases for consumers.

Consumer sentiment: at a 12-month low

The consumer confidence index has been falling for the third month in a row, this time by nearly 4 points, and has thus fallen to a 12-month low. The population’s satisfaction with their financial situation over the past year has deteriorated significantly, and expectations for the next year are also not favorable. Although the perception of the money that can be spent on high-value consumer goods and expectations for the economic situation have deteriorated only within the margin of error, concerns about inflation have increased.