Hungary Economic Confidence Improves to Five-Month High From Two-Year Low
Hungary’s economic sentiment index improved to a five-month high in February after dropping to a two-year low the previous month as businesses and consumers became less pessimistic about the future.
The index rose to minus 22.5, the highest level since September, from minus 26.8 in January, the Budapest-based GKI research institute said today in an e-mailed statement. The business confidence index increased to minus 12.4 from minus 16.3, while the consumer confidence jumped to minus 51.2 in February from minus 56.6.
Hungary’s currency has been the best-performing in the world this year since Premier Viktor Orban last month pledged to come to a “quick” agreement with the European Union and the International Monetary Fund on a loan. Talks broke down in December after a dispute over a Hungarian law the institutions deem to be a threat to central-bank independence.
The forint rallied 9.1 percent this year as of 11:03 a.m. in Budapest on Feb. 24, after falling 16 percent in the second half of last year, which was the biggest decline in the world in that period.
The government can’t begin formal talks on international aid until it meets EU and IMF demands to change a new central bank regulation. The 27-member bloc also requested changes to the overhauls of the judiciary and data-protection ombudsman’s office while the IMF demanded “tangible” steps from Orban to engage on economic policy issues before starting negotiations.
The European Commission on Feb. 22 proposed to suspend 495 million euros ($655 million) in development subsidies in 2013 to press Hungary to narrow its budget deficit in a sustainable way.
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