MFB company-sentiment indicator rises above 50

Analysis

After two years of languishing under 50 points, the Hungarian Development Bank's (MFB) biannual indicator of sentiment among companies in Hungary rose to 52.7 points in the spring survey from 47.0 points last autumn. The upturn reflects increasing readiness to invest in fixed assets. The proportion of companies planning fixed asset investments and development shot up to a record, at least 50%, MFB said on Tuesday. An MFB Indicator over 50 indicates positive expectations among companies in Hungary for the upcoming twelve months, while reading under 50 indicate negative expectations. The proportion of companies with redundant capacities sank under 50%. The number of companies that experienced a deterioration of macro-economic conditions in the past twelve months fell to a two-year low, but their proportions still exceeds 50%. Most companies expect the Hungarian economy to remain in recession in the spring of this year, but they anticipate the rate of the fall to slow. The first time in the series history, the proportion of companies expecting bigger domestic sales in the next twelve months is higher than that of those expecting shrinking demand.

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