GKI’s economic sentiment index fell sharply in November, falling below its level in early summer. According to a survey conducted by GKI Economic Research Co. with the support of the EU, this is a consequence of falling business expectations. The consumer confidence index rose minimally recently, although due to its decline in the previous three months, it also fell short of its June level (within the statistical margin of error). Households were interviewed in early November and companies in mid-November.

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You can reach the archive of survey summaries here.

After a two-month decline within the statistical margin of error, GKI’s economic senti-ment index rose slightly in October; however, it still did not reach its July level. According to a survey conducted by GKI Economic Research Co. with the support of the EU, the im-provement in October was the result of more favourable business expectations, and a modest increase followed two months of stagnation. However, consumer expectations have been deteriorating for the fourth month in a row. As a result, GKI’s economic sen-timent index offset almost exactly half of its April fall by October.

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You can reach the archive of survey summaries here.

In mid-March 2020, GKI outlined two scenarios with a GDP fall of 3 per cent and 7 per cent, respectively in its forecast for 2020. At that time, even the first scenario was a very pessimistic prognosis. In June, GKI ruled out the possibility of a 3 per cent recession and set the expected rate of decline in the 5-7 per cent range. Owing to another wave of the pandemic, GKI now, in September 2020, considers only the -7 per cent forecast to be viable, adding that not only a better but also a worse situation may develop. After a 6.1 per cent decline of GDP in the first half of the year (and a 13.6 per cent in the second quarter), GKI expects a contraction of around 8 per cent in the second half of 2020. The rate of GDP decrease may have reached around 7 per cent in the third quarter (when the impact of the pandemic was smaller) and around 9 per cent is projected in the fourth quarter, based on available limited data and the GKI economic sentiment index. GKI still expects a 4.5 per cent recovery in 2021, with high uncertainties, and assumes that growth will only start in the second quarter compared to the same period last year. The Hungarian economy will probably reach the GDP level of 2019 only in 2022. The change in Hungary’s GDP is expected to be slightly more favourable than the EU average; however, in a regional comparison it will be only weak-medium.

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The archive of earlier forecasts is available here.

After August, the GKI economic sentiment index decreased also in September, within the statistical margin of error. This is due to some deterioration in consumer expectations, as business expectations stagnated. After a shock-like fall in the outlook for domestic econom-ic participants in April, there was a significant positive correction in May and June and a more modest one in July. Thus, the GKI economic sentiment index eliminated more than half of its April fall. By September, the extent of this elimination decreased to only half of the April fall.

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You can reach the archive of survey summaries here.

Only half of the April decline in GKI’s economic sentiment index resulting from the panic caused by the pandemic has been eliminated during the past four months. Moreover, according to the empirical survey conducted by GKI (www.gki.hu) with the support of the EU, consumer expecta-tions even deteriorated slightly and business expectations remained unchanged.

You can download the report from here.

You can reach the archive of survey summaries here.