Hungary PMI Shows Contraction in December in Sign of Recession
Hungary’s purchasing managers’ index declined in December, in the latest signal that the economy probably failed to emerge from its recession last year.
The PMI, as reported by the purchasing managers of 100 manufacturing companies, fell to 48.9 points in December, the second-lowest reading last year, from a revised 52.1 points in November, MLBKT, the company which compiles the data, said in a report today.
Hungary is battling its second recession in four years as government policies damage investor confidence and trade and banking links with the slumping euro area drag down growth. The economy shrank for a third consecutive quarter in the July- September period.
Industrial output, the engine of the economy, plummeted 3.8 percent in October, the most in almost three years, indicating the nation’s recession probably extended into the fourth quarter of last year.
The economy will expand 0.3 percent this year and 1.3 percent in 2014 after contracting 1.2 percent last year, according to the the latest European Commission forecast published on Nov. 7.
Prime Minister Viktor Orban’s government is damaging the economy through discriminatory, opaque and unpredictable policies, leading to record-low investments and a lack of growth, the Joint Venture Association, one of the biggest company lobby groups, said on Dec. 11.
The PMI index is a weighted average of five indexes: new orders, production volume, employment, transportation time, and purchased inventory. A reading below 50 indicates a contraction in output.
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