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 strengthened in comparison to the previous month. Employment continued to be the most positively assessed, improving from -3.4 in the previous month to -0.7. In March, the perception of the economic environment improved from -28.2 in the previous month to -27.0, the sub-index measuring inflation perception changed from -71.1 to -68.9, and that measuring the perception of one’s financial situation went from -11.9 to -11.6.
Compared with February, the biggest positive shift in the March 2025 household survey is that people are confident that the forint exchange rate will strengthen.
When asked “What do you think the exchange rate of the forint against the euro will be in the next 1 year?”, in March, 2.4% of respondents (0.1 percentage points less than in February) said that “it will strengthen significantly”. In addition, based on household responses, 16.1% of respondents (up 4.8 percentage points from February) believe that “it will strengthen slightly”, while 20.0% (up 3.0 percentage points) believe that “it will not change”, 32.8% (1.1 percentage points less) expect that “it will weaken slightly”, while 24.4% (5.6 percentage points less) expect the Hungarian currency exchange rate to weaken significantly against the euro.
Looking at households’ sense of prosperity by age group, one of the five categories shows a weakening, while four show a higher value. The biggest improvement was found in the 50-59 age group: after a gain of 6.8 index points, -13.2 is the highest this month. This is followed by the 18-29 age group with -14.5 (3.1 index point improvement) and the 60+ age group with -16.3 index points (2.5 index point decrease). In March, we measured -17.1 index points for the 40-49 age group, a gain of 2.2 index points compared to February, while the 30-39 age group showed -18.7 index points (a gain of 1.5 index points).
For the business survey, the values of the four sub-indices fell in March. In March, the economic environment sub-index fell from -26.7 in the previous month to -29.9, the business environment index from -20.9 to -24.3, the production environment sub-index from -8.1 to -11.1 index points, and the industrial environment index from -2.2 to -5.4.
For companies, the largest positive change in March 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 more positive answers in March than in February. This month, 1.1% of companies (after 1.7% in February) indicated that the EUR/HUF rate would appreciate significantly. However, 16.9% forecast a slight appreciation (+1.3 percentage points from February), while 23.3% (+1.1 percentage points) expect the exchange rate to remain unchanged. 39.5% (down 2.5 percentage points) of the companies surveyed expect a slightly weaker exchange rate, while 10.7% (down 2.7 percentage points) of the companies expect a significantly weaker one.
Looking at the breakdown of companies by sector, it can be seen that, on average, business sentiment worsened in all the sectors surveyed. This month, trade fell by -7.7 index points, agriculture by -5.1 index points, industry by -4.7 index points, construction by -2.2 index points and services by -1.2 index points. In March, the strongest sense of prosperity was recorded in industry (-10.9) and the weakest in trade (-20.8).
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.
