The prosperity index remained in negative territory, determined by the uncertainty caused by the prolonged Russia-Ukraine war and the economic sanctions. Significant improvement in economic expectations is likely to occur if the war ends, inflation remains in the central bank’s target range (between 2% and 4%), the interest rate environment becomes more favourable, and energy markets see sustained low prices.
The four sub-indices of the household prosperity index weakened in comparison to the previous month. Employment continues to be the most positively assessed, although it has deteriorated from -2.4 in the previous month to -3.4. In February, the perception of the economic environment deteriorated from -27.9 in the previous month to -28.2, the sub-index measuring inflation perception changed from -66.0 to -71.1, and that measuring the perception of one’s financial situation went from -10.3 to -11.9.
Compared with January, the biggest positive shift in the February 2025 household survey is that people are more confident about the stability of their jobs.
When asked “Are you worried that you or one of your family members will lose your or his/her job in the next 6 months?”, 47.9% of respondents in February (3.0 percentage points more than in January) said they were “not at all worried”. Based on household responses, 21.0% of respondents (2.3 percentage points less than in January) said they were “rather not concerned”, 19.3% (0.4 percentage points less) said they were “rather concerned” and 11.0% (0.8 percentage points less) said they were “very concerned”.
The largest negative shift according to the survey into households was in future inflation expectations. Households’ expected average inflation rate over the next year is shifting towards higher rates.
Looking at households’ sense of prosperity by level of education, one of the four categories shows an increase, while three show a decrease. For those with primary education or less, the prosperity index improved by 2.6 index points to -16.4 index points. Among those with vocational school or vocational school leaving certificate, those who have completed secondary school as well as those with tertiary education, the sense of prosperity has become more pessimistic (by 1.7, 3.4 and 2.1 index points, respectively). Overall, in terms of current economic sentiment, the -16.4 index points for those with no more than primary education is the most optimistic, followed by -17.2 for those with tertiary education, -18.0 for those with vocational school or vocational school leaving certificate and -18.1 for those with secondary education.
For the business survey, two sub-indices improved, and two deteriorated in February. The business environment sub-index improved from -29.0 in the previous month to -26.7, and the business environment sub-index improved from -22.6 to -20.9. The production environment sub-index decreased from -7.6 to -8.1 index points, while the industrial environment sub-index decreased from 1.0 to -2.2 in February.
For companies, the largest positive change in February 2025 was measured for the future exchange rate of the forint against the euro.
When asked “What do you think how the EUR/HUF exchange rate will change in the next 1 year?”, business leaders gave overall significantly more positive answers in February than in January. This month, 1.7% of companies (after 0.8% in January) indicated that the EUR/HUF rate would appreciate significantly. Further, 15.6% forecast a slight appreciation (+4.8 percentage points from January), while 22.2% (+5.0 percentage points) expect the exchange rate to remain unchanged. 42.0% (-2.8 percentage points) of the companies surveyed plan for a slightly weaker exchange rate, while 13.4% (-7.8 percentage points) of the companies plan for a significantly weaker forint exchange rate.
Companies’ sectoral breakdown shows that the sense of prosperity improved on average in two sectors and worsened in three. This month, the indices of trade (+1.2 index points) and industry (1.1 index points) improved. At the same time, each of agriculture and construction changed by -0.6 index points, while services changed by -0.1 index points. This month, the strongest sense of prosperity was recorded in industry (-6.2) and the weakest in services (-14.7).
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.
