Hungary’s Consumer Confidence Index (CCI) regained pre-crisis levels in March 2010.

This trend mirrors growth in business confidence. One may think this means that Hungarians make a very thorough and educated analysis of their economic situation, both at international and national levels.

This may be true, but it’s surely not the only (nor the main) factor that affects the social mood. We must keep in mind that Hungarians will elect a new parliament on April 11. A brief look at the CCI’s history reveals that optimism rises in pre-election months, only to nosedive after the elections. This tendency can last for as long as a year.

 

 

Altough the CCI reflects public expectations regarding the financial position of households, it is not tied to retail sales volumes. After the 2002 elections, the CCI dropped more than 30 points in 18 months, but the retail trade volume index remained at least five points higher than the previous year throughout the period. The second Gyurcsány cabinet witnessed a drop both in the CCI and retail trade. Just as the indicators began to gain momentum, the financial crisis struck and sent them tumbling.