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Consumer confidence improves slightly in Q4 after big drop in Q3

The sentiment of Hungarian consumers improved slightly in the fourth quarter of 2006 after falling sharply in Q3 with the announcement of government austerity measures, according to the latest consumer confidence index by Ecostat, the research arm of Hungary's Central Statistics Office (KSH).

Ecostat's consumer confidence index was 33.2% in Q4 2006, 2.3 percentage points more than in the previous quarter, but well under the 45.5% level in Q4 2005. Consumers' assessment of their own financial situations hardly changed from Q3 to Q4: 57% offered a fair assessment, 22% gave a poor assessment and 4% said their financial situation was very bad. Only 15% said their financial situation was good. Some 36% of consumers said their financial situations had not changed from a year earlier, while 37% said their situations had worsened.
Asked about their outlook for the coming year, 32% of consumers said they expected their financial situations to worsen moderately and 29% said they expected a drastic worsening. Ecostat noted that average net household income was Ft 177,000 per month in Q4, or Ft 65,000 per household member, but differences in income varied widely. The wealthiest 20% of Hungarians earned on average five times as much as the poorest 20%.
In an assessment of the Hungarian economy, 36% said it had worsened moderately in the previous twelve months and 33% said it had worsened much. Only 6% said the economy had improved, although this ratio was still higher than in Q3. Asked about their outlook for the economy, 26% were moderately pessimistic and 34% were very pessimistic. Only 15% said things would get better.
About 80% of respondents said consumer price inflation would pick up in the coming twelve months to exceed 5.9%.