| Hungary's combined monthly index of business and consumer confidence dropped to minus 24.6 in December 2011, its lowest level in two years, economic research company GKI reported. After months of steep deterioration, the slight rebound in November turned out to be a one-off improvement. The December value is almost equal to the level reached in end-2009 in the midst of the financial crisis and four times lower than the January 2011 figure. Among the two sub-indices, the consumer confidence index deteriorated more, falling from minus 49.5 to minus 53.3, the lowest level in 27 months. The appraisal of households regarding their personal financial situations and savings capacity in the coming 12 months worsened, but the expectations regarding the prospects of purchasing high-value durables improved compared to previous months. Business expectations, which led the positive overall tendency in November, remained almost unchanged, being down 0.5bps in the month. The sentiment of the firms in the service sector deteriorated substantially, falling to the October level. In the industry, the assessment of the production and stock was slightly better, while expectations for orders were quite upbeat. After a stagnation in November, the confidence index in the construction sector improved slightly in December. However, the sector remained the most pessimistic. The retail confidence index edged down in December almost reaching its October level. In terms of expectations about the Hungarian economy as a whole, consumers and firms of all sectors remained on the negative side. The index is prepared by the Hungarian think-tank GKI and Erste Bank. |
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