Unemployment rates may improve in Hungary soon

There are now sectors that are ready to hire people, so fears of further unemployment may ease a bit, although the economic situation still remains worse worldwide than how it was before the pandemic.

GKI Gazdaságkutató (Economic Researcher) regularly monitors the expectations of both firms and consumers. After the sudden worsening of the outlook for many participants of the Hungarian economy in April, there was a slight improvement and correction in the following months, reported Forbes.

GKI’s conjuncture index showed a mild increase by 2 points to minus 18.2 points in July. This was due to the improving expectations of consumers and business service companies, and the inactive state of the other sectors. According to their survey, the consumer confidence index increased by 6 points to minus 26.9 points, and the business confidence index went up by one point to minus 15.2 points in July compared to June.

The business confidence index in July 2020 is the same as the initial one at the beginning of 2013. In the industry, restarting seems to be difficult, as the confidence index in this sector did not change from June to July. While the assessment of order stocks improved, the expectations of production worsened.

Construction expectations remained the same as well, this branch’s satisfaction with production and order stocks worsened, too, compared to the previous three months.

Read alsoHungary’s construction output in May down 20.1 pc yr/yr

The commercial confidence index improved within the margin of error in July. Despite the selling position and the assessment of supplies improving, the expected orders decreased.

For service companies, both the assessment of recent business performance and the expected traffic expectations in the coming months showed positive improvements.

The business sphere’s willingness to provide work improved a bit in July. In the commercial and service spheres, more companies plan on hiring than on firing. In the industry and construction spheres, however, the opposite can be said.

The Hungarian population no longer fears unemployment as much as they did previously, but the picture is still much worse than before COVID-19. The drive for price increases only strengthened in the industry, while slightly weakening in the other sectors. Perceptions of the future of the Hungarian economy also improved in July, with the outlook for all sectors growing except for the industry.

Consumer sentiment also somewhat improved, with the GKI consumer confidence index adjusting significantly in May – and continued adjusting at a slower rate in June and July – after the considerable fallback in April when the measuring began. In July, all four sub-indicators of the consumer confidence index improved.

The index rose 11.3 points in May due to the slow decay of the coronavirus and the easing of the intense uncertainty in April, it then rose further by 5.7 points in June and by 5.9 points in July, making up for a total of 61 per cent of the decline in April. The index is currently at the same level measured in fall 2015.

GKI assesses both the development of the population’s own financial situation and its own ability to save up in the future as moderately improving. The latter indicator is already slightly above the level it was at in February.