Customers feel worse: how will this improve consumption?

By: Trademagazin Date: 2024. 02. 26. 15:49

According to the latest monthly economic survey of GKI Gazdaságkutátó, residential consumer prospects have significantly deteriorated in Hungary, which may also challenge local economic growth plans. The decline in the consumer confidence index in February shows a strong deterioration of the financial situation experienced in the last 12 months and the prospects for the next 12 months, the last time such a decline was registered after the Russian invasion of Ukraine.

The assessment of one’s own money that can be spent on high-value consumer goods also became less favorable, and the assessment of the country’s economic situation in the next 12 months also became worse. This trend is not really in line with the government’s goal that economic growth is mainly expected from the revival of consumption. Minister of National Economy Márton Nagy highlighted the importance of overcoming people’s cautious consumption.

Based on the GKI data, however, this goal may be difficult to achieve at an adequate pace, as the consumer confidence index pulled the overall economic index down by 3 points. At the same time, the positive trend, which has been going on for almost a year and a half, has not been interrupted, and business expectations have changed only slightly.

Despite the negative development of the population index, inflation expectations have decreased and people are less worried about unemployment. According to GKI, the milder increase in company prices can be good news from the point of view of inflation prospects.