Hungary's GKI economic confidence index keeps deteriorating in September.

By bne IntelliNews September 27, 2011
The combined monthly index of business and consumer confidence, prepared by the Hungarian economic research company GKI and Erste Bank, recorded a new bottom level for the year in September, the think-tank reported. The index fell to minus 20.9 from minus 18.9 in the previous month. After improving in end-2010 and early 2011 to minus 5.1, the combined index preserved a strong negative tendency in the last months, reaching the lowest value in nineteen months. The deterioration in September stemmed mainly from worsening in the consumer confidence sub-index, while business sentiment declined only marginally. GKI notes that due to the time in which the survey is conducted, it does not reflect several significant changes that may affect customers' expectations such as the depreciation of the Swiss franc, the official introduction of the early loan repayment scheme and the amendments in the tax system. The consumer confidence index dropped to minus 47.2pts in September as the appraisal of households regarding their personal financial situations, saving capability and the number of unemployed worsened as compared to August. Business expectations' decline in September was due mostly to further deterioration in the construction sector index, while industrial and trade expectations even improved on the month. For construction firms, production has been below expectations recently, while for the industrial ones - the last developments, including the received new orders, were not so bad, but the future production outlook is unfavourable, GKI said. The retail confidence index edged up in September as sales positions improved marginally, but stock of orders decreased. Expectations with regard to turnover and intention to hire new employees also lowered. In terms of expectations about the Hungarian economy, consumers and all business sectors remained on the negative side.

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