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Hungary acceleration indicator drops further in October - Világgazdaság

Analysis

The Acceleration Indicator (GYIA), a measure of ten different economic and financial indicators compiled by business daily Világgazdaság, fell 0.41% in October from a month earlier after dropping 0.42% the previous month, the paper said on Thursday.

The indicator, which is designed to forecast changes in GDP, declined for the fifth consecutive month, the paper said, noting that the indicator even stopped growing in a yr/yr comparison.

Six of the measure's ten components deteriorated, three showed improvement and one was stable.

The latter was the level of real interest rates, which seems to have broken a long upward trend, and, with inflation set to speed up, it can be expected to fall mid-term, which will help the economy. Industrial output, however, declined month-on-month, as did domestic sales in the sector, and labor market conditions also deteriorated, Világgazdaság said. Germany's business climate worsened further, which is bad news for Hungarian exporters, and the weak performance of the BUX index also had a negative impact on the GYIA.

The increase in the stock of consumer loans and real wage growth, which reflect a pick-up in domestic demand, had a positive influence on the GYIA, the paper said.

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