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Large firms continued to be optimistic about the performance of the Hungarian economy, with less than 10% expecting deterioration. Businesses were also upbeat about the prospects of their own companies, although the number of pessimists was up a notch, from 16% to 21%.
The improvement in overall confidence was underpinned by companies' outlook on domestic and especially export sales. Of Top-100 firms, one third foresaw export sales improving and most of the remainder expected no change, the brightest forecast in the past six months. In domestic sales prospects, most respondents expected no change in the coming period.
In other indicators, investment activity remained robust, with a two-year high 64% of respondents planning developments in the coming period. Inflation expectations have subsided further, at 4.5% on annual average for 2005. Large companies did not position themselves as the main driver of CPI, as they only planned to increase their prices by 2.9% on average this year.
