GKI has revised its growth forecast. For 2022, it raised its GDP forecast to 3.5-4 per cent from 2.5-3 per cent previously, and lowered its GDP forecast for 2023 to between 2.5-3 per cent from 3.5-4 per cent. The change is a consequence of faster-than-expected growth in the first quarter and stronger-than-expected austerity and inflation, a deteriorating global political situation, and strained relations with the EU.
After May, GKI’s economic sentiment index fell by 5 points in June as well to its 15-month low. According to the empirical survey conducted by GKI Economics Research Co. with the support of the EU, business expectations fell again by 3 points in June, while con-sumer expectations dropped again by around 10 points compared to the previous month. The last time households were more pessimistic than now was the outbreak of the Covid pandemic.
After improving by 8 points in April, the GKI economic sentiment index fell by 5 points in May. This is a very significant fluctuation, but the May figure is about the same as a year earlier. According to the empirical survey conducted by GKI Economic Research Co. (www.gki.hu) with the support of the EU, business expectations fell by around 5.5 points in May and consumer expectations by 9.5 points. This is a return to the otherwise upbeat view of recent months, after the over-optimism of April. An exception is the assessment of the future of the national economy, which was worse in the last ten years only at the beginning of the Covid pandemic and during the austerity of the Széll Kálmán plan.
In April, GKI’s economic sentiment index jumped to its level in spring 2019, well before the COVID crisis. This level has only been reached in one month since the crisis, in October 2021. According to the empirical survey conducted by GKI Economic Research Co. (www.gki.hu) with the support of the EU, economic expectations improved in all sectors and among consumers as well. In April, the concerns following the Russian attack on Ukraine almost disappeared, and these concerns were almost only echoed by the declining, but still high, pessimism about the future of the Hungarian economy.
The war launched by Russia against Ukraine and the resulting widespread international economic sanctions are forcing the global economy, including the Hungarian economy, onto a new economic path, which can only be forecast with great uncertainty in both the short and medium term. In the short term, the most striking are the sharp spike in inflation, the general stock market fall, the general depreciation of the dollar, and the instability of global supply chains (from energy to food, raw materials and components). The latter confront governments with the need to rapidly develop a new system of world economic relations, especially in the medium term, while taking into account environmental considerations.