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.
Others
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.
GKI’s economic sentiment index may be past its lowest point
In January, GKI’s economic sentiment index rose marginally, but for the third month in a row. According to the empirical survey conducted by GKI Economic Research Co. with the support of the EU, the overall improvement in the consumer confidence index during this quarter is still within the statistical margin of error and remains below the panic levels seen at the onset of the Covid pandemic. The rise in the business confidence index is slightly more noticeable, at a level broadly similar to two years ago. Both companies and households were much more optimistic about the outlook for the Hungarian economy than in December.
By the end of 2022, the more than half-year decline of GKI’s economic sentiment index stopped
Business and consumer expectations improved modestly in December. According to a survey conducted by GKI Economic Research Co. with the support of the EU, the rise in the business confidence index was solely due to a significant improvement in industrial expectations, as other sectors became more pessimistic to a greater or lesser extent. The consumer confidence index has been rising, albeit marginally, for the second month in a row. However, households remained more pessimistic than during the Covid-related panic in spring 2020. The views of businesses and households on employment and inflation were unchanged in December, but both businesses and households saw the future situation of the Hungarian economy as worse than in November.