Although GKI’s economic sentiment index rose in May compared to April, it still did not reach its March level. Business expectations also remained worse than in March, despite an improvement in May. Consumer expectations deteriorated in May compared to April. However, according to the empirical survey conducted by GKI Economic Research Co. with the support of the EU, both businesses and households were less pessimistic than last autumn’s low. In May, perceptions of the employment situation continued to improve among both companies and households, while intentions to raise prices stopped.
GKI’s economic sentiment index fell in April after five months of growth
In April, business expectations fell back to their level at the beginning of 2023, and the consumer confidence index also declined slightly. According to a survey conducted by GKI Economic Research Co. with the support of the EU, expectations in the business sector deteriorated, especially in industry and services. However, intentions to raise prices in all sectors and consumers’ inflationary expectations declined significantly.
A 0.5 percent decline and 19 percent inflation expected in 2023 – Summary of the March 2023 forecast of GKI Economic Research Co.
Hungary entered a technical recession in 2022, facing serious imbalances, and it became very isolated internationally. The Russian-Ukrainian war, the related energy crisis (security of supply and prices) and the impact of the international banking crisis in 2023 on financial and real processes cause major global political and economic uncertainties.
GKI economic sentiment index rose markedly in March
Both business and consumer expectations improved significantly in March, with GKI’s economic sentiment index rising for the fifth month in a row. According to a survey conducted by GKI Economic Research Co. with the support of the EU, in the business sector expectations of industrial and service companies improved significantly, while expectations in construction and trade deteriorated noticeably, but to a lesser extent. Consumers were no more worried than they were in 2020, during the panic of the Covid outbreak. However, pessimism was still very strong. In March, companies’ efforts to raise prices declined substantially and their willingness to employ increased, as confirmed by consumer sentiment. The evaluation of the state of the Hungarian economy became much more positive than in February, both in the business sector and among households.
GKI’s economic sentiment index has risen by small steps for the fourth month in a row
In February, both business and consumer expectations improved, but continued to reflect a poor mood. According to the empirical survey conducted by GKI Economic Research Co. with the support of the EU, consumers were still more pessimistic than they were in 2020, during the panic that started when the Covid pandemic broke out. In comparison, busi-ness sector expectations were more favourable, broadly in line with the end of 2020. Ser-vice companies were now the least pessimistic, while industrial companies were the least pessimistic in January. The perception of the employment situation changed little, but companies’ efforts to raise prices and consumers’ inflationary expectations declined markedly.