Hungarian business confidence deteriorates, companies forecast price hikes – GKI survey

BUDAPEST, Dec. 20 (Reuters) – Hungarian household confidence improved slightly in December

But the business climate has deteriorated with companies forecasting price hikes, an investigation by think-tank GKI revealed on Monday.

GKI said that while corporate intentions to raise prices amid generally rising inflation strengthened further in December, household inflation expectations weakened after several months of strengthening.

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Hungary’s inflation hit an annual level of 7.4% in November, a 14-year high, forcing the central bank to step up the pace of its monetary tightening. Read more

“The intentions of companies to raise prices have strengthened further (in December) except in industry,” GKI said in its monthly survey, adding that plans to raise prices in the construction sector did not had not been so pronounced in 20 years.

“Almost three-quarters of companies that build homes are preparing to raise prices over the next three months,” GKI said, adding that among commercial firms, two-thirds predicted price increases, and about half of service sector companies had such plans.

“Business expectations for the Hungarian economy were significantly worse in all sectors than in November,” he added.

However, households became a little more optimistic in December.

Facing a close election next year, Prime Minister Viktor Orban’s government has flooded the electorate with handouts, including a $ 2 billion income tax refund for families and an extra month of retirement.

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Reporting by Krisztina Than; Editing by Toby Chopra

Our Standards: Thomson Reuters Trust Principles.

Laura T. Thrasher