Hungarian Economic Sentiment Improves to Strongest in 11 Years

Hungary’s economic-sentiment index jumped to the highest level in more than 11 years as businesses and consumers became less pessimistic about their prospects.

The index rose to minus 2.9, the highest since October 2002, from minus 6.1 in November, the GKI research institute in Budapest said in an e-mailed statement. Business confidence increased to 4, the first positive reading in 32 months, from minus 0.1 in November, while the consumer-confidence gauge rose to minus 22.7 from minus 23.3.

Prime Minister Viktor Orban, who leads in all opinion polls ahead of elections next year, is working to accelerate growth as the economy emerges from its second recession in four years. The central bank last week raised its economic-growth forecast for this year to 1.1 percent from 0.7 percent and said it expects 2.1 percent growth in 2014.

The improvement in business confidence was driven by the retail and services industries, GKI said. Consumer confidence, which improved “robustly” over the previous three months, continued to recover as households perceived an improvement in the outlook for their finances over the next year, GKI said.

Orban has cut household energy prices by 20 percent in two steps this year. Ruling-party lawmakers will decide on a third round of cuts to electricity and gas costs in January, Fidesz parliamentary group leader Antal Rogan said on Dec. 14.

GKI’s indexes are calculated as a balance of positive and negative answers to questions about the outlook for the economy.