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Ecostat Acceleration Indicator inches down in August

The Acceleration Indicator (GYIA), a measure of ten different economic and financial indicators compiled by Ecostat, a research institute under Hungary's Central Statistical Office, and by the business daily Világgazdaság, fell 0.03% in August from the previous month, suggesting that growth, which began at the end of 2009, has come to an end.

Revised figures show the index, which had been rising steadily since November 2009 though as been losing momentum since the spring, was already in negative territory in July.

Among the indicators the GYIA measures are non-food retail sales, real interest rates, the real value of the Budapest Stock Exchange's main BUX index, industrial output, stock of vehicle loans, the yield curve for government securities, money supply and real wages.

The analysts noted that the index somewhat contrast with economic confidence surveys, which still suggest improving optimism. The GYIA indicator seems to support the expectation that economic growth will come to a halt in the second half of the year.

The indicator fell in August even though more of its components rose than dropped. A drop of real interest rates and the beginning of money supply growth were, however, not enough to reverse the decline of the composite indicator.

Germany's economic expectations deteriorated at the end of the spring, which has begun to exercise an adverse influence on the Hungarian economy. The BUX made an upwards correction after the decline of the previous month.

The spread between long-term and short-term government securities yields increased, which is a bad sign for economic performance, just as the monthly decline in real wages. Another negative factor was the increase in the average time spent looking for a job. Even the remarkable improvement in industrial output could not offset the negative factors in August.

The analysts note that the two new indicators, the stock of consumer loans and the volume of domestic industrial sales, both pointed upwards. (MTI-ECONEWS)