Hungary Economic-Sentiment Index Drops from 16-Year High

Hungary’s economic-sentiment index dropped in May after turning positive for the first time in almost 16 years in April, as business and consumer confidence deteriorated after Prime Minister Viktor Orban’s re-election.

The index fell to minus 1.2 from plus 1.7 in April, which was the highest since 1998, the GKI research institute in Budapest said in an e-mailed statement. The business gauge dropped to 4.8 from a 16-year high of 7.7 and the consumer-confidence index declined to minus 18.4 from minus 15.3.

“The perception of Hungary’s economic outlook deteriorated in all industries and also among consumers,” GKI said. The services industry led declines as a drop in expected sales volume weighed on companies.

Orban, whose Fidesz party retained its two-thirds parliamentary majority in April 6 elections, is seeking to maintain the fastest pace of economic growth since 2006. Hungary’s gross domestic product grew 3.5 percent in the first quarter from a year earlier, led by manufacturing and construction, as output rose in all areas of the economy except financial services.

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

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