Economy 25 October 2024, 9:55am

Hungarian citizens' economic sentiment is broken - GKI

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In October, the overall expectations of the business sector remained unchanged compared to the previous month, but consumers became slightly more pessimistic, according to a survey by GKI Economic Research Institute. The slow upward trend stalled with a two-month decline in the household sentiment index, with the last time we saw a lower index than this one was in February. The composite GKI business and consumer survey sentiment index fell for the fourth month in a row, falling in small steps to an eight-month low.

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The GKI business confidence index was unchanged in October compared to September. However, within the overall picture of stagnation, there are marked differences in the evolution of expectations across sectors. In the second month of autumn, month-on-month expectations improved in industry and especially in construction, while business services became slightly more pessimistic and trade firms more markedly so. Thus, by October, trade had become the most pessimistic sector.

The aggregate propensity to hire of businesses in the second month of autumn was not significantly changed compared to September - although it strengthened in industry and weakened in services. The perception of the predictability of the business environment improved substantially. Price increase plans have increased only modestly, mostly in business services. The main obstacle to future expansion of production and services is lack of demand (perceived by 55% of firms). One in four firms face labour shortages and one in five have financial and funding problems. Lack of raw materials and capacity is a problem for only 6% of respondents.

The GKI consumer confidence index was little changed in the March-September period, after a significant spike in January-February.

With a 2-point decline in October compared to the previous month, this indicator reached an eight-month low.

Respondents rated both their financial situation in the past 12 months and their expectations for the next 12 months as worsening compared to September, and the country's economic situation in the next 12 months as worsening. The perception of own money to spend on high value consumer goods remained little changed. The public's expectations for inflation and the outlook for the number of unemployed did not change significantly from the previous month.

Cover photo (for illustration purposes onyl): Getty Images