Household and business economic expectations have improved

Household and business economic expectations have improved

According to the April 2023 survey of Századvég Konjunktúrakutató, the sense of prosperity among households and businesses has become more favourable. The household index, measured on a scale of -100 to +100, improved from -19.2 to -18.2, while the business index improved from -15.2 to -13.2. The prosperity index remained in negative territory, driven by the Russian–Ukrainian war, a higher inflationary environment and uncertainty caused by economic sanctions. Less turbulence and falling prices in financial, foreign exchange and commodity markets than in previous periods, as well as a stronger forint exchange rate, have all reduced uncertainty. However, a stronger improvement in the sense of prosperity will only be possible if the war ends, inflation moderates significantly after peaking, energy markets are no longer highly uncertain and prices become sustainably low.


Three sub-indices of the household prosperity index improved and one worsened compared to the previous month, and, overall, the index also improved slightly compared to March. Employment continues to be the most positively assessed, although it has deteriorated to 2.0 from -1.3 in the previous month. Households are most negative about inflation, but this indicator has also picked up from -88.0 to -85.0. The perception of the economic environment rose to -23.3 from -25.7 in the previous month, while the financial situation went from -16.9 to -15.9.


In April, the biggest positive shift for households was for major expenditures planned for the next year (e.g. buying a home, renovation, buying a car). This is in view of the fact that 3.4 percentage points more citizens surveyed (22.9% instead of 19.5%) plan to spend more in the next year.


For the business survey, all four sub-indices improved compared to the previous month. The economic environment indicator improved to -23.0 from -26.8 in the previous month, the industrial environment indicator improved to -9.0 from -9.4, the production environment indicator improved to -9.4 from -11.2 and the business environment indicator improved to -21.2 from -22.5.


Among companies, the most positive development this month was in their expectations for the forint-euro exchange rate. Instead of 24.9% in the previous month, 28.8% now believe that the Hungarian currency will strengthen to some extent, and only 33.3% think it will weaken somewhat, down from 38.7% in the previous month.

More and more companies find it increasingly difficult to raise their sales prices. 7.5% of the companies surveyed said that their sales prices would fall to some extent (compared with 7.8% the previous month). Some growth was forecast by 46.9%, up from 50.8% in the previous month. It is also interesting that the proportion of companies that do not expect their sales prices to change in the next year has increased significantly (from 36.9% to 40.1%).Budapest, 21 April 2023.

About the prosperity index

The purpose of the prosperity survey conducted by Századvég Konjunktúrakutató is to provide information to decision-makers and analysts on current and near-term economic developments. Since August 2019, our Institute has been producing the business and consumer prosperity index on a monthly basis. Our monthly survey asks 1,000 business leaders and 1,000 adult residents about their assessment of the economic situation and their expectations. For the two groups, we ask 29 and 28 questions respectively, covering a wide range of economic life. Among the responses received, positive ones (e.g. expected economic improvement) are given a positive score, while negative ones (expected decrease in employment) are given a negative score. The scores are then averaged and converted to a scale between -100 and +100 to obtain the prosperity indices. Thus, the higher the value of the prosperity indices, the more positive households’ and companies’ perception of the economy is. In addition, for both the household and the business survey, 4 sub-indices are constructed using a subset of the questions to illustrate the evolution of economic sentiment in a particular area.

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