GKI’ economic sentiment index reached its new historic peak in December. According to the empirical survey conducted by GKI with the support of the EU, business expectations have never been more favourable than now, and consumer expectations were more favourable only once, during the few months of the Medgyessy government’s 100-day programme in 2002.
The Hungarian economy is proceeding on a path indicated in the September 2017 forecast of GKI. Economic growth accelerates due to the surge in EU transfers as well as the increase in consumption driven by steadily rising wages due to the forthcoming elections and a shortage of labour. After 2.2 per cent in 2016, GDP will grow by 3.8 per cent both in 2017 and 2018. Although this rate is well above the EU average, it is one of the lowest in the CEE region, and no major changes can be expected in 2018 in this regard.
Trends in the Hungarian economy of the first half of the year have continued in the past few months. Although the 3.8 per cent GDP growth in the third quarter of 2017 once again exceeded the EU average of 2.5 per cent, it is among the low ones in the CEE region. GKI maintains its GDP growth forecast of 3.8 per cent for 2017 and 2018. More and more international institutions call the attention of the Hungarian government to establish the foundations of sustainable economic growth during these relatively favourable years.
In November, GKI’s economic sentiment index was again near to its historic peak reached in September. According to the empirical survey conducted by GKI with the support of the EU, in November expectations improved slightly in the business sector compared to October, whereas they declined among consumers within the statistical margin of error.
The GKI real estate indices for Budapest and Hungary stood at -1 and 0 points in October 2017, respectively. Compared to the previous quarter, the index in the capital has dropped by 2 points but the index for the whole country has not changed. The Budapest index has decreased by 4 points over a year and the country index has increased by 2 points. The peak of the property market outlook is over for about a year but the present outlook is still positive.