The GKI real estate indices for Budapest and Hungary stood at -1 and 1 point in January 2018, respectively. The Budapest index has dropped within the error margin, while the index for the whole country has increased 1 point, compared to the previous survey completed in October. Compared to one year earlier, the index in the capital has decreased 4 points and it has dropped 1 point for the whole country. The real estate outlook in Budapest peaked five quarters ago and a very modest decline is experienced since then. The national index reached its highest point a year ago and the present one is close to it.
Compared to its historical peak at the end of 2017, GKI’s economic sentiment index advanced in January within the statistical margin of error. According to the empirical survey conducted by GKI with the support of the EU, this was the result of a minimal progress in business expectations and a slight deterioration of consumer expectations. Companies consider labour shortage as the main obstacle to expansion.
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.
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.