Business expectations improved, consumer ones worsened in October

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.

The decline of around 7 per cent this year and deteriorating equilibria will be followed by a relatively slow correction next year

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.

You can download the forecast from here.

The archive of earlier forecasts is available here.

The GKI economic sentiment index has not increased for the second month

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.

You can download the report from here.

You can reach the archive of survey summaries here.

The rise in GKI’s economic sentiment index stopped in August

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 ( with the support of the EU, consumer expecta-tions even deteriorated slightly and business expectations remained unchanged.

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You can reach the archive of survey summaries here.

Housing market is over the fright caused by the epidemic, GKI residential indices show a little upturn – GKI residential market survey results for July 2020

The outlooks of housing companies has been deteriorating since mid-2019. In April, the epidemic exacerbated the negative process. According to the results of the joint survey of GKI and Masterplast conducted in July, there was some rebound, a slight but positive correction both in the national average and in the capital compared to the previous quarter. Housing market players, especially in the capital, are beyond the shock of the epidemic and look a little more optimistic about the future, but their prospects are still not really optimistic in annual terms. At the same time, the market for home renovations picked up during the epidemic, and the turnover of building material stores increased significantly year-on-year. In the next year, the price of flats in Budapest may fall by an average of 5% and in the countryside by 8-13%.

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You can download the excel with the charts here.