According to the Ministry of National Economy's standpoint, the continuous improvement in GKI research institute’s economic confidence index supports the expectations that the growth that began this year will prove to be permanent.

Also the Hungarian economy’s growth could speed up to almost 2.5%, which in turn would mean that if economic sentiment continues to develop favourably, growth for the whole of 2013 could exceed 1%.

According to the GKI's November poll, both business and consumer confidence has continued to increase, which on the one hand confirms that economic operators as well as households are beginning to feel the effects of new growth, while also suggesting a continuation and reinforcement of the currently experienced favourable economic trends. This improvement is also excellent in international comparison. Since the end of last year, Hungarian economic sentiment figures have shown the most marked increase in both regional and European Union comparison. Hungarian confidence index indicators are currently at a higher level than both the regional and European Union indices.

GKI’s consumer confidence index increased at a rarely seen pace within the space of just a single month in November. This has also been mirrored for several months in retail figures that show improving turnover. According to the Ministry’s forecast, consumer confidence and household consumption will be further increased by a higher level of household income, which has been significantly contributed to by the latest decrease in public utility prices, the pay rise awarded to teachers and healthcare employees in the autumn, and by improving employment figures.

Within the private sector, in November the industrial confidence index continued its increase that began in late summer. Both the increase of industrial production to 5.5% in recent months and a 24% percent increase in processing industry orders are having a positive effect on business sentiment. Accordingly, industrial growth is expected to increase more rapidly in the fourth quarter, contributing significantly to increasing the GDP.

Similarly, the construction industry confidence index has also been increasing continuously since the end of last year and its figure for October is the highest since 2006. Growing confidence within the construction industry partly mirrors the increase in construction industry output of 9.3%, and is also attributable to the positive outlook driven by an almost 40% increase in orders. Together with the latest figures it would seem justified to expect a similarly dynamic increase in construction industry growth in the upcoming period.

(Ministry for National Economy)