The growth rate of the Hungarian economy was noticeably lower in the second quarter of 2017 than in the first one, and it was one of the lowest in the CEE region. However, it still exceeded the EU average. The spectacular expansion of investments continued, and on this basis, GKI raised its GDP forecast for 2017 to 3.8 per cent. The trends are favourable in the short term; however, long-term solutions are still missing.
GKI’s economic sentiment index reached its historic peak in July. It decreased slightly in August, within the statistical margin of error. According to the empirical survey conducted by GKI with the support of the EU, the business confidence index fell slightly in August over the previous month. However, consumer expectations increased a bit.
In Hungary, the faster than expected GDP growth in the first quarter of 2017 was followed by a slight slowdown in April and a pick-up in May. GDP growth is expected to accelerate to around 3.5 per cent in 2017 from 2 per cent in 2016, primarily as a result of investments rising this year, whereas they declined last year. Although external and internal equilibria will deteriorate slightly in 2017, and inflation will accelerate, these trends are acceptable in the short term.
GKI’s economic sentiment index and the business confidence index have never been as high as now so far during its more than twenty years of history. According to the empirical survey conducted by GKI with the support of the EU consumer expectations deteriorated slightly compared to June, although they still reflect strong optimism.
GKI’s economic sentiment index was as high as now only once, namely in the summer of 1998, and the business confidence index has never been as high as now so far during its more than twenty years of history. Consumers are also very optimistic. However, this outstanding Hungarian optimism hardly exceeds the upper limit of the relatively narrow band characteristic of the last three years.