Hungarian consumer confidence high ahead of holidays

Thursday 18.12.2008 (21 months ago)
Hungary :: Property News

In stark contrast to what is occuring in the West, Hungarian consumers appear prepared to spend more than ever this holiday season, despite the international financial crisis.

According to a report in Britain’s Guardian newspaper, Hungarian retailers are optimisitc about the year’s busiest shopping season, as they expect that consumers will not put off the purchase of big ticket items in light of global financial concerns.

Gyorgy Vamos of Hungary’s National Trade Association told journalists that retail sales are expected to pick up in the weeks and days preceding Christmas and that some retailers have already noted a jump in demand for some items, including electronics, food and possibly even clothing.

Food retailers, however, will experience the greatest increase in demand and it is entirely possible that this Christmas season will bring better sales than last year.

In 2007, Hungarian consumers spent more than $4.3 billion during the holiday season and it is now likely that this year’s figures will either match or surpass these numbers.

There are two key reasons that explain why consumer confidence appears to be increasing in Hungary, while it is on a dramatic downward spiral in other Western countries.

One reason is that the Hungarian forint experienced an unusually strong surge in value earlier this year, both against the euro and the US dollar.

This allowed some consumers to save money on purchases. The other key factor is that food prices have either stagnated during the second half of the year, or they have actually gone down, due to a drop in fuel prices and therefore lower transportation costs.

© Prime Asset Investments Ltd.