In the first quarter of 2017, Hungarian GDP expanded by 4.1 per cent, faster than expected. Therefore, GKI revised its growth forecast upwards to an annual growth rate of at least 3.5 per cent before gaining detailed data. Construction and industry grew faster than previously thought, whereas the growth rate of trade was slower. This is particularly surprising in the light of extremely fast increase in wages.
In spite of its relatively modest rise in May, the GKI economic sentiment index reached its three-year peak. According to the empirical survey conducted by GKI with the support of the EU, the rise was mainly due to service companies: their exploding optimism raised their sentiment index to a level unseen for eighteen years. Expectations in industry deteriorated slightly, whereas those in trade dropped considerably. Expectations in construction barely improved and those among consumers improved only within the statistical margin of error.
The GKI economic sentiment index did not change in April, thus it continues to reflect strong optimism. According to the empirical survey conducted by GKI with the support of the EU, in October expectations improved notably in the business sector, reaching their 16-month peak, whereas they declined considerably among consumers.
The economic sentiment index increased in March 2017 for the fifth consecutive month. Although the monthly changes were not significant, the index reached its two-and-a-half-year peak. According to the empirical survey conducted by GKI with the support of the EU, the last time when business expectations were as favourable as now had been last summer, whereas consumer expectations were as favourable as now eleven years ago.
Following an increase of three months, the improvement of GKI’s economic sentiment index stopped in February. According to the empirical survey conducted by GKI with the support of the EU, business expectations did not change, consumer ones deteriorated somewhat. The GKI economic sentiment index has fluctuated in a relatively narrow band for three years, and like in January, at present, too, it is somewhere around the top of this band.