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Aug 07, 2017 - Zoltán Kovács

Business and consumer confidence in Hungary hits a 20-year high

Optimism among business leaders and consumers in Hungary has reached a 20-year high, according to a recent survey.

The results published by GKI, a prominent economic research institute often critical of the government, measure economic sentiment based on responses from companies in industry, trade, construction and services. The consumer component is calculated from “responses given to questions concerning expected financial position of households, the expected economic and unemployment situation of the country, and the prospects for saving”. The research was backed by the EU and was conducted according to EU methodology.

The paper asserts that the recent figures show significantly positive expectations about economic prospects. With the index reaching 4.2 in the results of this latest survey, optimism has not been this high in the history of democratic Hungary. Considering some of the latest economic data, companies and consumers have good reason to be bullish.

The Hungarian economy has seen its highest wage growth in 15 years, according to Minister for National Economy Mihály Varga. According to the Central Statistical Office, Hungary's average gross monthly wage rose by an annual 12.9 percent to 296,100 HUF in May. Hungarians are not only spending more from their increased salaries – demonstrated by the annual six percent growth in retail sales -  but we’re saving more, too.

Recall the situation prior to 2010, and we see a country living on loans. Since then, we bade farewell to the IMF, reduced debt, slashed the deficit, created jobs and reduced unemployment to record lows. Today, Hungary’s annual industrial output is rising by almost nine percent (some 34 percent since the beginning of 2010) and the unemployment rate stands at 4.3 percent following 60 consecutive months of decline.

These numbers mark milestones on Hungary’s road to recovery. It’s been a long one, but we’re clearly turning the corner. As Prime Minister Orbán said recently at the Bálványos Summer Open University and Student Camp, “Not since the Treaty of Trianon has Hungary been as close as it is today to regaining its strength, prosperity and prestige as a European country.”