German and Hungarian Economic Sentiment Rises in July

In July, Germany's ZEW Indicator of Economic Sentiment jumped to +26.3 points, the highest level since February and well above analysts' forecast of +18.0. The Eurozone counterpart also rose to +23.4 points, marking its strongest reading in the period. ZEW President Achim Wambach linked the improvement to the impact of recent reform packages, noting that export‑oriented sectors and domestic demand showed stable growth, while geopolitical tensions around the Iranian conflict and oil prices remained a source of uncertainty.

Meanwhile, Hungary's GKI (Business and Consumer Confidence Index) increased by three points, reaching a 1½‑year high. The consumer confidence component recorded an eight‑month streak of improvement, while the business confidence index hit a 38‑month peak. Despite the upbeat sentiment, firms remained cautious on pricing, with the price expectations index near a two‑year low and only 26% planning price hikes in the next three months. Employment expansion plans also slipped, indicating that stronger confidence has not yet translated into hiring growth.